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With the Compliments
of the
Carnegie Endowment for International Peace
2 Jackson Place,
Washington, D, C, U. S. A,
An ictnovvkdgineni of the recei|it af thia publieatbn will b« apprrdatetl
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A. CHAUNCEY NEWUN COLLECTION
OF
OCEANS LAW AND POUCY
LAW LIBRARV
OF THE
UNIVERSITY OF VIRGINIA
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Carnegie Endowment for International Peace
DIVISION OP ECONOMICS AND HISTORY
John Bates Clark, LL.D., Director
ECONOMIC AND SOCIAL HISTORY
OF THE WORLD WAR
{BRITISH SERIES)
JAMES T. SHOTWELL, Ph.D.
GENERAL EDITOR
WITH THE COLLABORATION OF THE BRITISH ;
EDITORIAL BOARD
OXFORD
AT THE CLARENDON PRESS
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ECONOMIC AND SOCIAL HISTORY OF
THE WORLD WAR
BRITISH EDITORIAL BOARD
Sir William H. Beveridge, E.C.B., M.A., B.C.L. (Chairman).
H. W. C. Davis, C.B.E., M.A.
Professor E. C. K. Gomier, C.B.E., M.A., Litt.D.
F. W. Hirst, Esq.
Thomas Jones, MA.
J. M. Keynes, C.B., M.A.
Professor W. R. Scott, D.Phil., Litt.D., LL.D., F.B.A.
Professor J. T. Shotwell, Ph.D. {ex oficio).
For List of other Editors and the plan of the Series see end
of this volume.
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I.EXTENT OF ALUED SHIPPING CC5NTRQL ATTHE AKMISTICE
It vfilhfsmiiiaiqo%(f tie sagc/iJoqiD^^
II. EMPLOYMENT OF WORLD TONNAGE AT THE ARMISTICE
NOTE. 11k tonna^ angered ly thes€ diagrams consist
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ALLIED
SHIPPING CONTROL
AN EXPEBIMENT IN
INTEENATIONAL ADMINISTRATION
^*'"'^*"'^ ' WiTHOmWH
flCiiwi^ *«y «^^E AMERICAN
IdROOIS
ACAOfiny
BY
J« A» S A L X £ xvy C/* IS*
OOMMANDMUM DM LA LieiOV jyEONNMUB
DIRECTOB OF SHIP BEQUIIITIOimrO
SBCmSTABT TO THE ALLIED MARITIME TBAK8P0BT OOVirCIL AND
CHAimMAV OP THE ALUED MABITIME TRAM8POST EXEOUTXTE
U««^^-
MAY 5 iy«a
OXFORD: AT THE CLARENDON PRESS
London, Edinbuigb, New York, Toronto, Mdboome and Bombay
HUMPHREY MILFORD
1921
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FBIHTSD IN BHOLAND
AT THB OZIOBD UKIVBBSITT PBBS8
AAA.
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EDITOE'S PEEFACE
In the autumn of 1914 when the scientific study of the effects
of war upon modem life passed suddenly from theory to history,
the Division of Economics and History of the Carnegie Endow*
ment for International Peace proposed to adjust the programme
of its researches to the new and altered problems which the War
presented. The existing programme, which had been prepared
as the result of a conference of economists held at Berne in
1911, and which dealt with the facts then at hand, had just
begun to show the quahty of its contributions ; but for many
reasons it could no longer be foUowed out. A plan was therefore
drawn up at the request of the Director of the Division, in which
it was proposed by means of an historical survey, to attempt
to measure the economic cost of the War and the displacement
which it was causing in the processes of civilization. Such an
* Economic and Social History of the World War ', it was felt,
if undertaken by men of judicial temper and adequate training,
might ultimately, by reason of its scientific obligations to truth,
furnish data for the forming of sound pubUc opinion, and thus
contribute fundamentally toward the aims of an institution
dedicated to the cause of international peace.
The need for such an analysis, conceived and executed in the
spirit of historical research, was increasingly obvious as the War
developed, releasing complex forces of national hfe not only for
the vast process of destruction but also for the stimulation of new
capacities for production. This new economic activity, which
under normal conditions of peace might have been a gain to
society, and the surprising capacity exhibited by the belligerent
nations for enduring long and increasing loss — often while pre-
senting the outward semblance of new prosperity — ^made necessary
a reconsideration of the whole field of war economics. A double
obligation was therefore placed upon the Division of Economics
and History. It was obliged to concentrate its work upon the
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viu EDITOR'S PREFACE
problem thus presented, and to study it as a whole; in other
words, to apply to it the tests and disciplines of history. Just
as the War itself was a single event, though penetrating by seem-
ingly unconnected ways to the remotest parts of the world, so
the analysis of it must be developed according to a plan at once
all embracing and yet adjustable to the practical limits of the
available data.
During the actual progress of the War, however, the execution
of this plan for a scientific and objective study of war economics
proved impossible in any large and authoritative way. Incidental
studies and siu*veys of portions of the field could be made and were
made under the direction of the Division, but it was impossible to
imdertake a general history for obvious reasons. In the first place,
an authoritative statement of the resources of belligerents bore
directly on the conduct of armies in the field. The result was to
remove as far as possible from scrutiny those data of the economic
life of the countries at war which would ordinarily, in time of
peace, be readily available for investigation. In addition to this
difficulty of consulting documents, collaborators competent to
deal witii them were for the most part called into national service
in the belligerent countries and so were unavailable for research.
The plan for a war history was therefore postponed until condi-
tions should arise which would make possible not only access to
essential documents but also the co-operation of economists,
historians, and men of affairs in the nations chiefly concerned,
whose joint work would not be misunderstood either in purpose
or in content.
Upon the termination of the War the Endowment once
more took up the original plan, and it was found with but
slight modification to be applicable to the situation. Work was
b^un in the sununer and autumn of 1919. In the first place
a final conference of the Advisory Board of Economists of the
Division of Economics and History was held in Paris, which
limited itself to planning a series of short preliminary surveys of
special fields. Since, however, the purely preliminary character
of such studies was further emphasized by the fact that they were
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EDITOR'S PREFACE ix
directed more especially towards those problems which were then
fronting Europe as questions of urgency, it was considered best
not to treat them as part of the general survey but rather as of
contemporary value in the period of war settlement. It was clear
that not only could no general progranmie be laid down a priori
by this conference as a whole, but that a new and more highly
specialized research organization than that already existing would
be needed to undertake the Economic and Social History of the
War, one based more upon national grounds in the first instance
and less upon purely international co-operation. Until the facts
of national history could be ascertained, it would be impossible
to proceed with comparative analysis ; and the different national
histories were themselves of almost baffling intricacy and variety.
Consequently the former European Committee of Research was
dissolved, and in its place it was decided to erect an Editorial
Board in each of the larger countries and to nominate special
editors in the smaller ones, who should concentrate, for the
present at least, upon their own economic and social war history.
The nomination of these boards by the General Editor was the
first step taken in every country where the work has begun. And
if any justification was needed for the plan of the Endowment,
it at once may be found in the lists of those, distinguished in
scholarship or in public affairs, who have accepted the responsi-
bility of editorship. This responsibility is by no means light,
involving, as it does, the adaptation of the general editorial plan
to the varying demands of national circumstances or methods of
work ; and the measure of success attained is due to the generous
and earnest co-operation of those in charge in each country.
Once the editorial organization was established there could
be Uttle doubt as to the first step which should be taken in each
instance toward the actual preparation of the history. Without
documents there can be no history. The essential records of the
War, local as well as central, have therefore to be preserved and to
be made available for research in so far as is compatible with public
interest. But this archival task is a very great one, belonging of
right to the governments and other owners of historical sources
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X EDITOR'S PREFACE
and not to the historian or economist who proposes to use them.
It is an obligation of ownership ; for all such documents are pubUc
trust. The collaborators on this section of the war history, there-
fore, working within their own field as researchers, could only
survey the situation as they found it and report their findings in
the form of guides or manuals ; and perhaps by stimulating
a comparison of methods, help to further the adoption of those
found to be most practical. In every country, therefore, this was
the point of departure for actual work ; although special mono-
graphs have not been written in every instance.
This first stage of the work upon the war history, dealing with
httle more than the externals of archives, seemed for a while to
exhaust the possibiUties of research. And had the plan of the
history been limited to research based upon official documents,
little more could have been done, for once documents have been
labeUed ' secret ' few government officials can be found with
sufficient courage or initiative to break open the seal. Thus vast
masses of source material essential for the historian were effec-
tively placed beyond his reach, although much of it was quite
harmless from any point of view. While war conditions thus
continued to hamper research, and were likely to do so for many
years to come, some alternative had to be found.
Fortunately such an alternative was at hand in the narrative,
amply supported by documentary evidence, of those who had
played some part in the conduct of affairs during the war, or who,
as close observers in privileged positions, were able to record
from first or at least second-hand knowledge the economic history
of different phases of the great war, and of its effect upon society.
Thus a series of monographs was planned consisting for the most
part of unofficial yet authoritative statements, descriptive or
historical, which may best be described as about half way between
memoirs and blue-books. These monographs make up the main
body of the work assigned so far. They are not limited to con-
temporary, war-time studies ; for the economic history of the war
must deal with a longer period than that of the actual fighting.
It must cover the years of ' deflation ' as well, at least sufficiently
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EDITOR'S PREFACE xi
to secure some fairer measure of the economic displacement than
is possible in purely contemporary judgments.
With this phase of the work, the editorial problems assumed
a new aspect. The series of monographs had to be planned
primarily with r^ard to the availability of contributors, rather
than of source material as in the case of most histories ; for the
contributors themselves controlled the sources. This in turn
involved a new attitude towards those two ideals which historians
have sought to emphasize, consistency and objectivity. In order
to bring out the chief contribution of each writer it was impossible
to keep within narrowly logical outlines ; facts would have to be
repeated in different settings and seen from different angles, and
sections included which do not lie within the strict limits of history ;
and absolute objectivity could not be obtained in every part. Under
the stress of controversy or apology, partial views would here and
there find their expression. But these views are in some instances
an intrinsic part of the history itself, contemporary measurements
of facts as significant as the facts with which they deal. Moreover,
the work as a whole is planned to furnish its own corrective;
and where it does not, others will.
In addition to this monographic treatment of source material,
a number of studies by specialists is already in preparation,
dealing with technical or limited subjects, historical or statistical.
These monographs also partake to some extent of the nature of
first-hand material, registering as they do the data of history
close enough to the source to permit verification in ways impossible
later. But they also belong to that constructive process by which
history passes from analysis to synthesis. The process is a long
and difficult one, however, and work upon it has only just begun.
To quote an apt characterization, in the first stages of a history
like this one is only ' picking cotton '. The tangled threads of
events have still to be woven into the pattern of history ; and for
this creative and constructive work different plans and organiza-
tions may be needed.
In a work which is the product of so complex and varied
co-operation as this, it is impossible to indicate in any but
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xii EDITOR'S PREFACE
a most general way the apportionment of responsibility of editors
and authors for the contents of the different monographs. For
the plan of the EQstory as a whole and its effective execution
the Greneral Editor is responsible ; but the arrangement of the
detailed programmes of study has been largely the work of the
different Editorial Boards and divisionalEditors, who have also read
the manuscripts prepared under their direction. The acceptance
of a monograph in this series, however, does not commit the editors
to the opinions or conclusions of the authors. like other editors,
they are asked to vouch for the scientific merit, the appropriate-
ness and usefulness of the volumes admitted to the series ; but
the authors are naturally free to make their individual contribu-
tions in their own way. In like manner the publication of the
monographs does not commit the Endowment to agreement
with any specific conclusions which may be expressed therein.
The responsibility of the Endowment is to History itself — an
obligation not to avoid but to secure and preserve variant narra-
tives and points of view, in so far as they are essential for the
understanding of the War as a whole.
J. T. S.
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PREFACE
The main object of this book is to describe the work of the
Allied Maritime Transport Council (the AJif.TX.) and its per-
manent organization^ the Allied Maritime Transport Executive^
as an eicperiment in international administration. It attempts
both to indicate the place which the Allied control of shipping
occupied during the last year of the war in the general economic
organisation of the Allies, and to discuss how far the principles
and methods of Allied co-operation then developed are of import-
ance for the permanent purposes of peace as well as the temporary
uses of war.
This Allied organization co-ordinated the c(mtrol of all Allied
shipping during the latter part of the war and may perhaps daim
to be» within the economic sphere, the most advanced experiment
yet made in international co-operaticm. It was, however, essen-
tially an organization co-ordinating, and not replacing, the national
departments which directed the respective mercantile marines
and through that direction ultimately dominated the supply policy
of the several Allied countries. It was from the b^^inning based
upon the work of the national departments and did not, and could
not, have an existence independent of them.
If, therefore, its work is to be understood, it will be necessary
to say something both of the national systems of shipping control
and of the general system of control of supplies both national
and Allied.
Part I of the book is introductory. It describes the main
features of the econcmiic system which the war organization was
destined to change, and sketches in very slight outline the
shipping problem and its solution.
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xiv PREFACE
Part n contains a chronological account, still on a small scale,
of the growth of the national control of shipping in Great Britain
during the first three years of the war.
Part in describes, in four chapters, other main elements of
Control during the same period. The first gives an account of
the control of commodities, the second of the Blockade and the
relations with Neutrals which it involved, the third indicates the
importance of freights and profits in the development of control ;
the last chapter sketches the submarine campaign — ^the struggle
at sea — and for convenience this chapter, unlike those which pre-
cede it, covers the whole period of the war.
Part IV is intended to give an account, on a very much lai^er
scale, of the work of the Allied Maritime Transport Council itself
and its Executive during 1918, and to discuss the reasons which
made practicable and necessary the methods by which its results
were achieved.
Part V, an epilogue to the main theme, suggests some of the
conclusions which may be drawn for the future of International
Administration, an almost unexplored subject which demands
much fuller treatment than the limits of this book allow.
Part VI, an Appendix, contains a collection of official documents
and statistical information designed to illustrate and give authority
for the substance of the text.
The sketch in Parts I, II, and III is intended less as a contribu-
tion to the economic history of the war than as an introduction to
the theme of Part IV, and the scale on which particular subjects
in it are dealt with is determined by this consideration. In the
description of the work of the various departments of the Ministry
of Shipping, for instance, and of other organizations, space is given,
not in proportion to their intrinsic importance, but to their im*
portance from the point of view of their relation to Allied Control
under the Allied Maritime Transport Council.
Similarly, while some description is given of the British control
system, little is said of the corresponding organization in other
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PREFACE XV
countries, partly because I can speak with more Jmowledge and
authority of the f orm^ system, but mainly because Allied control
was based upon and associated with the British system, although
the work of the British system would not have been possible
without efficient controls in the other Allied countries.
My object is to describe the ground occupied by Allied control
during the war. In front of it, and surrounding it, is the much
larger territory occupied by national controls of shipping and by
the whole extensive economic organization of which they were
a part. I have taken the most durect path I could through this
lai^er territory to my destination, attempting to describe what is
visible on the way, but only within the limited range and from
the particular perspective of a traveller along a narrow road in
a vast r^on. Many others will, I hope, explore the wider territory
and will view it from many angles and in many perspectives until
at last it is surveyed in detail. Meantime, Parts I, II, and in
merely give the notes of a passing observer making his way
through to his own special field of survey.
A writer with official experience must submit to certain serious
limitations and restrictions. I have imposed on myself (sometimes
with great reluctance) as a self-denying ordinance the omission of
all names and any attempt to apportion either personal praise or
blame. The information used is throughout of a kind already
published ; and the necessary official permission has been obtained
for the publication of the official documents printed at the end of
the book.
The last six years have taught almost as much in the sphere
of civilian administration as in the art of warfare itself. Com-
paratively little, however, has yet been published, and the
lessons learned in each separate experiment are for the most part
known only at present to the actual persons who were engaged in
it. I venture to express the hope that each of the important
administrative experiments of the war may find some one who
took part in it to record and publish an account while his memory
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xvi PBEFACE
is still tresh. I believe that no economic history of the war that
is not based on a series of such individual records will be adequate.
In the actual circumstances in which the organization was de«
veloped and records kept during the war, no history based upon
documents without the aid of direct experience can give a faithful
picture. It is true that the inevitable bias which* comes from being
immersed in a single sphere of administrative work will require
to be discounted. But the general historian will find it easi^ to
make allowance for this than to overcome the difficulties with
which he would be faced if his raw material consisted only of
documents with no personal and direct evidence to interpret them.
J. A. b.
December 1920.
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TABLE OF CONTENTS
PARTI
INTRODUCTORY
THE ECONOMIC SYSTEM AND THE WAR PROBLEM
PAOB
CHAPTER I. THE IMPORTANCE OF SHIPPING IN THE WAR . 1
The German and Allied blockades, and the difference between them.
Shipping first becomes a crucial factor in the war in 1017. When
shipping is inadequate control of shipping involves control of supplies.
The defeat of the submarine.
CHAPTER II. SHIPPING AND THE FREIGHT MARKET . • T
Shipping a small industry in relation to its importance. Variety of
types of Merchant Vessels. The size of the chief National Marines.
Liners and Tramps. The main routes of World Traffic. British
Shipping* Its position at the outbreak of war. The Freight Market
and its working.
CHAPTER HI. PRIVATE ENTERPRISE AND PUBLIC CONTROL 15
The essential feature of the normal economic system ; it works itself
and needs no control. This is true even of finance. Defects of the
normal system under war conditions. Inadequate production and
distribution. The large proportion of persons devoted to * marketing '
and not ^ making \ The achievements in production of the Control
System. Objects and forms of Control. Lack of expert knowledge
available for the new Control System.
CHAPTER rV. THE SHIPPING PROBLEM AND ITS SOLUTION—
IN OUTLINE 24
Requisition for Government Requirements. Prohibition of Imports :
its advantages, its defects. Emergency measures. Control of Com-
modities. Selection of Imports by Allocation of Ships. The National
Solution. The Allied Solution.
b
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xviii TABLE OF CONTENTS
PART II
BRITISH SHIPPING CONTROL
PAGE
CHAPTER I. THE FffiST YEAR. BEGINNING OF SHIPPING
CONTROL 88
Chartering and Requisition. The Board of Trade and the Transport
Department. Trade Division of the Admiralty. Blue Book Rates.
Transport of Frozen Meat. Employment of Prizes. Losses and
Freight Rates in the First Year.
CHAPTER II. THE SECOND YEAR. CONTROL BY COMMITTEE 48
Losses and Freight Rates in the Second Year. The Ship Licensing
Committee. The Requisitioning (Carriage of Foodstuffs) Committee.
The Port and Transit Executive Committee.
CHAPTER III. THE SECOND YEAR (Contd.). CONTROL BY
REQUISITION 55
The Requisitioning System. The Shipping Intelligenoe Secjtion and
the Card Index. Proportionate Requisitioning. Commercial Branch.
Allocation of Ships to Service. The system of *' Conditional Release '.
Requisition and Commerce. Bunker Supplies. The Shipping Control
Committee. The Shipping Position in April 1016. Reconmiendations
of the Shipping Control Committee. Difference in character of Peace
and War Cargoes. The Shipping Position in the Second Year.
CHAPTER IV. THE THIRD YEAR. COMPLETION OF SHIPPING
CONTROL . . 69
The Shipping Position. Growth of the Shipping organization. Liner
Requisitioning. The Ministry of Shipping. Shipowners and ofiflcials.
The Imports Restriction Committee. The Tonnage Priority Com-
mittee. The new Submarine Campaign. Allocation of Shipping in
1017. The Entry of America. The Shipbuilding effort of 1917.
American Shipbuilding. Summary of First Three Years.
PART III
OTHER ELEMENTS IN BRITISH CONTROL
CHAPTER I. THE CONTROL OF COMMODITIES . . .88
The extent of Control. The order of its development. Food ControL
The Wheat Executive. Munitions. War Office Controls. Board of
Trade Controls.
CHAPTER II. THE BLOCKADE 98
Declaration of London. The tightening up of the Blockade. The
Reprisals Order of March 1915. The Rationing Policy. The Ministry
of Blockade. The effect of America's entry.
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TABLE OF CONTENTS xix
I
PAGE
NEUTRAL SHIPPING 102
Its importance. General Allied policy to neutrals. *' Bunker Control.'
The Chartering Conunittee. Shipping Agreements. The Norwegian
Coal Arrangement. Requisition. The Law of Angary. Neutral
Tonnage at the Armistice and its employment.
CHAPTER III. FREIGHTS AND PROFITS 100
High Freights the Origin of Control. The Responsibility for High
Freights : not the Shipowners'. The Difficulties of Controlling
Freights and Profits* The Government C Blue Book ') rates moderate.
Alternative methods of limiting profits. Their defects. The ultimate
solution. Control of Shipping combined with control of commodities.
Pre-war Profits. War Profits. Aggravating Factors.
CHAPTER IV. THE STRUGGLE AT SEA 117
The relation between naval and civilian action. The ineffectiveness
of the early submarine. Extension of range from British waters to
the Mediterranean. Defensive Armament. The civilian air-raid agita-
tion and its effect on the defence of Merchant Vessels. Dazzle-
painting. ^Protected Approach Areas.' The Intensive Submarine
Campaign. Its inunediate success. The Convoy System. Arguments
for and against. Its Organization. Outward and Homeward Convoys.
Its decisive success. Courage, skill, and endurance of the Naval
protecting forces and the Merchant Marine. The defeat of the Sub-
marine.
PART IV
ALLIED CONTROL
CHAPTER I. ALLIED ARRANGEMENTS IN THE FIRST THREE
YEARS 184
The Commission Internationale de RavitaiUement. The two prin-
ciples. Communication through Foreign Office. Direct contact.
Emergency assistance. Variety of method. Assistance on the basis
of a fixed quantity (Shipping Control Committee). The Agreement of
December 8, 1916. The Inter-Allied Shipping Committee — causes of
faOure. Control in Allied Countries : France, Italy, America.
CHAPTER II. THE AUTUMN OF 1917 144
The General Shipping Position. Its gravity. Its elements of hope.
Improvement of National Organization. Need for Allied Organiza-
tion. The Agreement of November 8, 1917. Its essential principles :
*" pooling ' of use of tonnage ; equal sacrifice. Negotiations with
American Mission.
CHAPTER ni. FORMATION OF THE ALLIED MARITIME TRANS-
PORT COUNCIL 151
The Paris Conference of November 1917. The * Special Committee
for Maritime Transport and General Imports', llie Memorandum
presenting the problem and proposing a solution. Agreement on
principles of co-operation. The rejection of the proposal of ieui
International Executive Board. The acceptance of the * Wheat
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XX TABLE OF CONTENTS
PAGE
Executive ' principle. The formation of a Council of Ministers and
a permanent Executive.
CHAPTER IV. FIRST MEETING OF THE COUNCIL (MARCH 1918) 156
Shipping Problems in the first months of 1018. Stress and anxiety at
this period. Contrast with the superficial appearance. Allocation of
Tonnage on basis of Wheat Executive programme. Coal for Italy,
New Programme of Supply. Coal for France. Difficulties of supply
and discharge.' First Meeting of the Council (March 11, 1018). The
first World's Balance Sheet. Dutch Tonnage. The French Coal
Committee.
CHAPTER V. SECOND MEETING OF THE COUNCIL (APRIL 1918) 165
Work of the Executive in March and April. Difficulties of Coal Sup-
plies. Economies in Shipping Arrangements. Second Meeting of
Council (April 1018). Programme Committees Established : detailed
resolutions. Neutral Tonnage. Belgian Relief . American Transport.
CHAPTER VI. THE NEW INSTRUMENT OF ALLIED CONTROL 175
Limits of the Council's Power and Authority. Constitution of CouBcil.
Constitution of Permanent Organization (The Allied Maritime Trans-
port Executive). The National and International functions of the
Members of the Council and Executive. Personal and Official Rela-
tions. The linking together of the National Administrations. The
Programme Committees. The Food and Munitions Councils. The use
of Statistics. Their limitations. Nature of the authority of the
Allied Organization.
CHAPTER VII. WORK OF THE EXECUTIVE, MAY-^FULY 1018 189
The four months' interval in the Council's Meetings. The Executive's
r61e of liaison. Italian and French Coal Supplies. Belgian Relief.
Wheat Supplies. American Mihtary Programme. Organization of
Programme Committees. The General Tonnage Position.
CHAPTER Vni. THIRD MEETING OF THE COUNCIL (AUGUST
1018) 197
The Food Programme criticized. Meeting of Council on August 29.
The Shipping Position in August. Civilian Commodities. Coal
Supplies.
CHAPTER IX. FROM AUGUST TO THE ARMISTICE ... 208
The Current Work. Supplies of the Fifth Year. The Problem and
Proposed Solution. Last Meeting of Council during the War
(September 80). Its decisions. Statement of Shipping Position in
September. Policy as to Public Announcements.
CHAPTER X. POSITION AFTER THE ARMISTICE . . .216
The Councils' loss of Authority. Shipping position in winter of
1918>19. The importance of Port Delays. Reasons for loss of
authority. Plans of Transport Executive for Armistice Work. The
pnlposed * General Economic Council '. The Allied Council of Supply
and Relief. The Supreme Economic Council. Armistice Tasks.
Enemy tonnage. Transport of food, of prisoners, of returning troops.
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CHAPTER XI. LAST DAYS OF THE COUNCH, • ... 226
Italian Coal before and after the Armistice. New Shipping Agree-
ments between Great Britain, France, and Italy. The end of co-
operative management. The Fifth Meeting of the Council (Febniary 1 ,
1910). Acquisition and allocation of German ships. The Sixth and
Final Meeting of the Council (March 10, 1919). Disruption of the
Council (April 7, 1919). Work of Executive April 1919-February
1920. Its end.
CHAPTER XII. RESULTS ACHIEVED 281
The function of the Council was to influence the executive action of
the National Govemments» not to take executive action itself. Allied
Food. Allied Munitions. Italian Coal. French Coal. Belgian Relief .
Neutral ^ Pool Tonnage \ Other work. Summary. Limits of the
Council's success.
PART V
INTERNATIONAL ADMINISTRATION
CHAPTER I. THE DIFFERENCE BETWEEN THE WAR AKD
PEACE PROBLEM 248
Limitations of the War Organization. Its motive power only possible
in war. The Problem simplified through the special and temporary
position of Shipping during the war. The nature of the War Achieve-
ment. The AUied Organization controlled the action without dis-
placing the authority of the National Governments. The difference
between Economic Control and Military Command.
CHAPTER II. PRINCIPLES OF INTERNATIONAL ADMINISTRA-
TION 249
The main principle of the Allied Organization. The Limitations of
Conferences. The Executive Organization. The Principle of Direct
Contact. Its relation to the Principle of the League of Nations.
Its dangers and its merits. Decentralization in Foreign Relations.
Summary of Principles of International Administration. Maxims for
the use of Committees.
CHAPTER HI. THE FUTURE OF INTERNATIONAL ADMINI-
STRATION 268
International Co-operation before the War. The limited character of
the official organization. The League of Nations. Mistaken concep-
tions of its rdle. Difficulties of the League : the incompleteness of
the Peace : the abstention of America : the increase of National
Separatism. The work of the League. Its three categories of duties :
to settle disputes ; to remove the causes of disputes ; to co-operate
in the solution of world problems. The possible economic work of
the League ; the direction of its Policy. The ultimate problem of the
League ; readjustment of administrative frontiers without war. The
economic conditions of success in this task. Two conceptions of
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xxn TABLE OF CONTENTS
PAGE
the League's position in Worid Government : an instrument for
humble tasks ; a vital influ«iee in all International policy. Geneva
as the centre of the League. The methods of the League, (a) linking
the National Administrations, (b) Publicity. The Brussels Financial
Conference. The League as a Secretariat of the Worid*s Government.
National Administraticm and the League. The League's World
Organization.
PART VI
(a) DOCUMENTS
1. The Allied Agreement of November 8, 1917 and its ai^lication 281
2. The need for American assistance and Allied co-operation 285
8. Creation of Allied Maritime Transport Council 205
4. Principle of Allocation of Neutral vessels brought into the Pool under
the direction of the Allied Maritime Transport Council • . . 205
5. Organization of the Allied Maritime Transport Council, Executive, and
Associated Allied Bodies 208
6. Development of Programme Committee 801
7. Food Progranmies : Correspondence between Allied Maritime Trans-
port Councfl and Food Councfl 804
8. Criticism of Food CouncU's Programme for Year 1018-10 . 808
0. Allocation of Tonnage in the Cereal Year 1018-10 .... 810
10. Tonnage and Imports Position as on July 81, 1018 .... 820
11. Armistice of November 11, 1018. Proposed provision as to enemy
ships and food. Resolution adopted by Permanent Representatives
of the Allied Maritime Transport Council and of the Inter- Allied
Food Council at Lancaster House, October 28, 1018 . 828
12. Unity of Control — ^the principle applied to Allied Supplies 824
18. Organization of Inter-Allied Controls 827
14. Post- Armistice Policy 820
15. World Tonnage Position at Cessation of Hostilities • '. . 880
16. Tonnage Agreement concluded with France on January 22, 1010 • 882
17. Allied Maritime Transport Council : Summary of decisions and resolu*
tions during the six Sessions 885
18. Sea-borne Traffic at the end of the War 845
(6) STATISTICS
1. Arrivals of British vessels from overseas during the period February-
April 1017 and the incidence of losses by enemy action . . 848
2. Blue Book rates 840
8. Earnings of Tramp Steamers from August 1014 to September 1016 • 851
4. Imports into United Kingdom, Italy, and France for the years 1018,
1016, and 1017 852
5. British monthly imports : Total estimated weights from July 1017
to October 1018, with monthly average 854
6. War losses of Merchant Vessels of Allied and Neutral Nations during
the period August 1014 to November 1018 — ^monthly totals . . 855
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TABLE OF CONTENTS xxiii
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7. Shipments of Coal to Italy and France during the period March 1018
to February 1910, and of Belgian Relief Cargoes during the period
June 1918 to November 1018 800
8. Launchings of Merchant Vessels of 100 gross tons and upwards during
the years 1914, 1915, 1916, 1917, and 1918 861
9. New Construction — ^Tonnage brought on to the United Kingdom and
. Colonial Registers during the period August 1914 to October 1918 —
monthly totals 862
10. New construction and War losses of British vessels — ^monthly Net
Loss or Gain 868
11. Employment of Allied and Neutral Tonnage on July 81, 1018 . • 864
12. Employment of Allied and Neutral Tonnage on October 81, 1918 . 865
18. Losses and gains of Allied and Neutral Tonnage . 866-7
14. Import Progranunes. Position as on November 16, 1018, of Require- .
ments and Arrivals 868
15. Neutral Pool Tonnage in various services as allocated by the Allied
Maritime Transport Executive during the period May 81, 1918, to
October 81, 1918 ... 869
16. Neutral Pool Tonnage in service f]X)m May 81, 1018, to October 81,
1918, dlassified by flag .869
INDEX 871
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PART I
INTRODUCTORY
THE ECONOMIC SYSTEM AND THE WAR PROBLEM
CHAPTER I
THE IMPORTANCE OF SHIPPING IN THE WAR
The German and Allied blockades, and the difference between them. Shipping
first becomes a crucial feustor in the war in 1017. When shipping is inadequate
control of shipping involves control of supplies. The defeat of the submarine.
If an adequate history of the war is ever written it will pro-
bably give as much space to the economic as to the purely military
struggle. It was as much a wax of competing blockades, the
surface and the submarine, as of competing armies. Behind these
two blockades the economic systems of the two opposing groups
of countries were engaged in a deadly struggle for existence, and
at several periods of the war the pressure of starvation seemed
likely to achieve an issue beyond the settlement of either the en-
trenched armies or the immobilized navies.
The conditions of the struggle were, however, very different
on the two sides.
The Central Powers from the first days of the war were cut
off from all overseas imports except for casual cargoes slipping
through the blockade or goods from contiguous neutrals. They
had no shipping problem, for they had no shipping opportunities.
Their mercantile marines were from the outset penned in their
harbours or confined to the immediately adjacent waters. Ger-
many's economic problem resulted not from the insufficiency but
from the cessation of overseas imports, and was throughout
a problem not of transport but of internal production and of the
distribution of increasingly inadequate supplies. During the first
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2 ECONOMIC SYSTEM AND THE WAR PROBLEM
two and half years of the war the pressure of the blockade was
continuously more effective and almost brought Germany to her
knees during the hard winter of 1916-17. The larger harvest of
1917 and the supplies of Roiunania left her in a better position
during the following winter, but by the next autumn she was
again in great difficulties and again faced with an almost im-
possible winter problem. In the event the blockade shared with
the military forces the credit of deciding the issue in proportions
which it is still impossible to determine with precision.
The Allied Powers on the other hand held the seas throughout
the war and had the world to draw from, on twamain conditions.
One was that they could find the money to buy, the other that
they could find the ships to carry. The first of these was the more
important factor until the intensive submarine campaign ranged
America with her wealth on the side of the Allies in the Spring of
1917 ; the second was the dominant consideration thereafter till
the end of the war.
The Crisis in 1917
It will be convenient at the outset to draw attention to this
vital distinction of date, on which greater emphasis will be laid
later. It is my strong opinion that in spite of high freights, in
spite of the practical difficulties of shipping organization, and in
spite of the various resulting inconveniences, there was no shipping
problem in the sense in which it ultimately confronted the Allies
until the winter of 1916-17 ; that is, until the intensive submarine
campaign, based upon sinking without warning, had begim or
was clearly in prospect. During the earlier part of the war the
Allies had to consider how to deal with rising freights and
their effect upon general prices ; they had to meet the public
demand for the reduction of shipowners' profits, and they had to
construct an organization to secure that essentials only should be
imported when shipping was no longer sufficient for both essentials
and luxuries. But during this period they did not have to face
the problem of importing their suppUes in tonnage barely sufficient
to bring in essentials, still less the more serious problem of cutting
off a large portion of the real necessities of the civilian population
and the combatant forces. This latter problem resulted, and
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IMPORTANCE OF SHIPPING IN THE WAR 3
resulted solely, from the increased destruction of shipping through
the new metiiod of submarine warfare announced to the world
in December 1916. It was to meet this problem that there were
constructed, firstly, the more rigorous and more comprehensive
systems of national control, and secondly, the instrument of AlUed
control described in this book.
About the same time as the new submarine campaign, and
largely as a consequence of it, America joined the AUies. Apart
alt<^ether from the reinforcement that she thus brought to the
military forces, her accession entirely altered the whole character
of the economic problem. Finance as a f imdamental factor in the
Allied position disappeared. For the new aUiance as a whole was
almost self-sufficient, and finance in such circumstances is a
problem either of national legislation, or at most of inter- Allied
arrangement. Finance within a country, or within an alliance
of which every member is determined upon victory, can be created
in a moment by a vote of a Congress or a ParUament, and with
America's entry therefore, finance ceased to be a crucial factor in
the conduct of the war. Ships, however, cannot be so hastily
improvised, and great as were the potential resources of America
and the prospect of relief which those resources ultimately offered,
her entry did not immediately alleviate the shipping position.
On the contrary, the direct contribution which America put into
the war in the form of her army of two milhons and the supplies
to maintain them entailed an even greater strain on shipping. Till
the end of the war the total number of American merchant ships
in war service was less than the niunber required to carry American
troops and supplies.
A few figures will illustrate the grave change in the situation
which was immediately caused by the new submarine warfare and
the nature of the problem which confronted the Allies during the
last two years of the war. During the year 1916 the average
monthly losses of British ocean-going ships were 24. In the first
six months of 1917 the average rose to 80. When the new cam-
pcdgn was in full force, 78 Bntish ships of this type were lost in
a single fortnight. By the end of 1917, Great Britain, France,
and Italy, had at their disposal a total mercantile marine that
amoimted to 18,000,000 tons as compared with 24,500,000 tons
B2
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4 ECONOMIC SYSTEM AND THE WAR PROBIJIM
before the war, and of this reduced tonnage they were employing
about 5,500,000 tons in direct war service. Every month the direct
requirements of the combatant forces were increasing, and the
pressure on the diminishing margin of the supplies required for
civiUan life and for the manufacture of munitions was becoming
more serious.
Shipping the Central Factor
In these circumstances shipping became the very centre of the
Allied problem and shipping control the centre of its organization.
For in the long chain that binds together the effort oi a country
or of an Alliance it is always the weakest Unk that is the most
important. The authorities in control of shipping acquired
a dominant position in exact proportion as they found themselves
unable to perform their proper task of meeting the requirements
of the other departments. Month by month as the war proceeded,
as the needs of imported war supplies increased and as the number
of ships to import them diminished, those responsible for the
suppUes of the Army, for the food of the civiUan population, and
for the raw materials for every form of industrial or military
manufacture, found themselves more and more in the position
of having to frame their programmes and direct tlieir policy in
accordance with the number of ships which they would be able
to secure. Month by month the shipping authorities, who desired
no such responsibiUty, found themselves obliged to add to their
proper task of picking the most suitable ships for the demands
made upon them, the much more onerous task of deciding between
those demands. Throughout the whole of this peiiod the shipping
authorities desired to see an organization in which they would take
a leading but not a dominant part, and which would enable these
competitive demands to be settled by adjustment between the
competing supply departments both within each country and as
between the AUies. The Allied Maritime Transport Council and
its Executive and the associated supply committees were the
final result of these efforts and the ultiinate solution of the problem*
During the whole of 1917 and 1918, therefore, the Allies were,,
partly by naval and partly by civilian action, silently fighting the
German submarine. The naval action included both attack
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IMPORTANCE OF SHIPPING IN THE WAR 5
against the submarine by destroyer, by aircraft, by mining, and
by depth charges, and also protection of the merchant ship by
defensive armament, by dazzle-painting, by guidance through
protected routes and, finally, by convoy. The civilian action con-
sisted of an organization both of shipping and of the distribution of
supplies designed to extract the maximum of utiUty from every
ton of importing capacity. In this long and hard-fought struggle,
of which for many months the issue was uncertain, the Navy, the
officers and men of the mercantile maxine,and the civilian officials
who controlled shipping and suppUes all took an essential part.
This book will lift a corner of the curtain behind which this drama
was being enacted. In what proportions the credit for the success-
ful answer to the submarine should be allotted it is impossible
at this moment to determine. Certainly the suppUes of the Allied
forces could not have been maintained without the naval pro-
tection of merchant ships, particularly without the amazingly
successful system of convoy. It is equally certain that no system
of naval protection would have been sufficient without the con-
tinuous and unfailing skill and courage of the officers and men
of the mercantile marine. It is also clear, however, that the effort
of both the convoying navy and the protected merchant vessels
would largely have been in vain without the intricate and elaborate
civilian organization by which only the most essential supplies
were selected for transport and preference was given to the most
vital needs of the country in their distribution.
Defeat of the Submarine
It is satisfactory to note that in whatever proportions the
credit may be justly assigned the victory was assured before the
end of the war. Throughout the war the civiUan populations were
maintained, not without inconveniences but without serious hard-
ships ; no military force ever went short, no military enterprise was
ever handicapped by failure in the ocean transport of its suppUes ;
and weU before the Armistice, Allied building had been so developed
and the losses so reduced that the number of ships was increasing
steadily from month to month. If the war had continued the AUies
would have been faced with an extremely difficult supply problem
through the winter of 1918-19 while the American forces were
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6 ECONOMIC SYSTEM AND THE WAR PROBLEM
being increased in France and their supplies were being hurried up
behind them, but they would have faced that problem with the
definite assurance that, in the absence of some new development,
it was a disappearing one, and that the supplies of their essential
needs would be maintained without great difficulty from the spring
and siunmer of 1919 onwards.
The submarine campaign was thus defeated definitely and
completely in its own sphere, and not as an incidental result of the
mihtary successes of the Allies. But for over a year it had been
the main hope, and by no means the impossible hope, of the Ger-
mans, and the main danger — a very deadly one — ^to the Allied
cause. Throughout 1917 the German Admiralty were pr(»nising
their Government an issue within six months. Hindenburg was
urging his tired armies not to victory but to endurance. ' We shall
conquer if we persevere till the submarine war shall have done its
work.' The recently pubUshed letters of the Crown Prince reflect
the waning hopes as month after month passed and the promised
issue was not achieved.
The decision of the German Government to embark on the
intensive campaign in 1917, with its consequent effect on America,
has often been spoken of as a reckless and f ooUsh gamble, but not
by any one who was concerned in countering it. It was indeed
unsuccessful, but unsuccessful only as a result of two counter-
measures which had not been developed when the campaign com-
menced — the protection of merchant ships by naval convoy and
the complete national and Allied control of suppUes. Without
these two counter-measures and. with the continuance of shipping
losses at the rate of April 1917, it is possible that the AlUes would
have been forced to abandon a large part of their mihtary effort
in the winter of that year ; it is certain that shipping could not
have borne the additional strain of transporting and supplying
the new American Army in the following summer.
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CHAPTER II
SfflPPING AND THE FREIGHT MARKET
Shipping a small industry in relation to its importance. Variety of types
of Merchant Vessels. The size of the chief National Marines. Liners and
Tramps. The main routes of World Traf&c. British Shipping. Its position
at the outbreak of war. The Freight Market and its woridng.
The World's Shipping
Merchant shipping has throughout history occupied both in
the pubUc mind and in the economic system of the world a place
altogether out of proportion to either the human effort or the
capital which it represents. The ordinary citizen of any civilized
town enjoys in his daily life the products of every quarter of the
globe. The very fabric of modem life is built upon the interchange of
the goods of widely sundered nations. But the steamships by which
the communications of the world are mauitained and its products
and manufactures exchanged have never exceeded in number
some 8,000. Those employed in manning them amount to some
450,000 and those in building them to perhaps another 250,000,
small numbers compared with the 8,000,000 persons occupied in
agriculture in a single country such as France. The total yalue
of all the ocean-going ships in the world before the war was not
more than some £300,000,000, that is, less than the capital invested
in two English railway companies. The total amount of steel
sunk in the ships lost during the war was only some 5,000,000 tons,
that is, not more than 12 per cent, of the steel production of
America alone in a single year.
These figures are ahnost trivial by comparison with those which
measure the effort of the belligerent countries in the war. It
would have been one of the most disproportionate things in history
if for the want of appUcation of so relatively small an amount of
human energy to one part of their economic system the whole
economic effort of the Allies had failed and the whole of their
military effort been wasted.
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8 ECONOmC SYSTEM AND THE WAR PROBLEM
The 8,000 or so vessels which composed the world's means of
overseas transport were not miiform and interchangeable units.
They ranged from an Atlantic liner of 40,000 tons, built for speed
and carriage of passengers and imfit for cargo, to a small collier
tramp of a twentieth of the tonnage. Few carried passengers
only, many carried passengers and cargo, most carried cargo
only. They ranged in speed from over twenty knots to less than
seven. Of those which carried cargo, some ran as liners and plied
with the punctuality and r^ular routine of a railway train through-
out the year. Others, the tramps, the adjusting element in sea
transport, went wherever the varying requirements of trade
and changing seasonal demands might call them. Some were
built to carry light freight, such as oats or wool, and had large
cargo-carrying space in proportion to their displacement. Others
were built for the heavier cargoes which, with little space, would
bring a vessel down to her PlimsoU marks.
The great bulk of the world's tonnage sailed under the flags
of a few great mercantile nations, as the following table will show :
PRINCIPAL SEA TONNAGE IN MIDSUMMER 1914
1600 Q.T. and
Total 100 G.T.
Upwards.
Under 1600 Q.T.
and Upwards.
Flag.
No.
G.T.
No.
Q.T.
No.
O.T.
British
. (1)
4,174
18,197,000
6,044
2,634,000
10,218
20,831,000
German
. (2)
743
3,799,000
1,154
620,000
1,897
4,419,000
U.S.A. (Sef
i and
Philippine
») . (3)
513
2,216,000
783
395,000
1,296
2,611,000
French
. (4)
367
1,602,000
659
308,000
1,016
1,910,000
Japanese
Italian
. (5i
429
1,496,000
726
330,000
1,155
1,826,000
. (6)
355
1,310,000
300
204,000
655
1,514,000
Dutoh
. (7)
263
1,285,000
447
207,000
710
1,492,000
Norwegian .
. (8)
323
1,087,000
1,331
891,000
1,654
1,978,000
Aostrian
. (9)
230
927,000
192
90,000
422
1,017,000
Greek
. (lOi
262
771,000
171
122,000
433
893,000
Spanish
. (Hi
229
664,000
359
222,000
588
886,000
Russian
. (12i
149
531,000
595
321,000
744
852,000
Swedish
. (13)
183
526,000
907
496,000
1,090
1,022,000
Banish
. . (141
156
466,000
430
338,000
586
804,000
Belgian
. (161
66
210,000
93
59,000
159
269,000
Portuguese
. (16)
13
58,000
91
34,000
104
92,000
8,445
35,145,000
14,282
7,271,000
22,727
42,416,000
NoTB. — ^While for seneral purposes vessels of 1600 G.T. or over may be taken
as ooean-going Tsssdu, a certain number of vessels in excess of that tonnage was
invariablv employed on local trade. The number of actual ooean-going vessels would
not greatly exceed 8,000.
This world fleet must be conceived as sailing under private
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SfflPPING AND THE FREIGHT MARKET 9
ownership and management, subject only to official regulations
designed to secure safety and to protect the conditions of the
seamen's employment.
Liners and Tramps
About half the tonnage, apart from the coastal craft, was of
the liner type, that is, it consisted of ships which ran between
r^ular ports to a r^ular time-table. These ships were for the
most part adapted for the carriage of many types of cargo simul-
taneously, and often passengers as well, and were the fastest and
best built portion of the world's fleet. They maintained stable
schedules of rates over long periods and retained the regular
custom of merchants who required to ship part-cargoes at regular
rates. To protect this r^ular custom against the casual com-
petition of the tramp steamer the liner companies were grouped
in international conferences. These made it impossible, by an
elaborate system of ' deferred rebates ', for merchants who could
not dispense with liner transport altogether to take advantage
of occasional opportunities of cheap freight on a tramp. The
merchant who shipped by a liner was entitled to a substantial
rebate on the freight he paid if, but only if, during a certain period
all his shipments were on liners ; a single shipment on a tramp
sufficing to forfeit the rebate. These conferences thus held half
the world's transport under a limited form of joint control, enough
to maintain regularity of service, but not enough to kill effective
competition. The permanent needs of transport on the great
trade routes were met by vessels thus running r^ularly and con-
tinuously to fixed time-tables ; and a list of the principal confer-
ences at once gives a picture of the main channels of world traffic.
(See page 10.)
The British mercantile marine before the war occupied the
leading position in the world and, in the Alliance which confronted
Germany, a position of overwhelming predominance. Of the
8,000 ocean-going vessels of the world the British Empire owned
about 4,000, and France, Italy, Belgium, and Portugal together,
owned barely a thousand. It was inevitable therefore that the
shipping control of the Allies should be based upon the British
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10 ECONOMIC SYSTEM AND THE WAR PROBLEM
PRINCIPAL LINER CONFERENCES AND NATIONALITY OF COMPANIES
(Alphabetical Order)
Europe — South Africa
British
Danish
German
Swedish
United States — South Africa British
India— South Africa
Europe — Australasia and British
New Zealand French
German
Europe — Straits and Far Austrian
East British
Danish
Dutch
French
German
Italian
Japanese
Russian
Spanish
Europe — India and Colombo British
French
German
Japanese
Europe — South America
(East Coast)
I Eiirope— West Indies and
Islands
Europe — South America
(West Coast)
Europe — North America
British
French
German
Italian
Spanish
British
Danish
Dutch
French
German
Italian
Spanish
British
French
Gernum
Italian
Austrian
British
Danish
Dutch
French
German
Italian
Norwesiaa
Swedi^
U.S.A.
system, and in fact the head-quarters of this control were through-
out the war in London.
Of the British overseas tonnage, a Uttle more than a third
of the vessels and a little less than half the tonnage were of the
Uner type. The great bulk of these vessels were in the hands of
a relatively small number, less than a score, of big liner companies.
These companies were for the most part highly developed organi-
zations of long standing and experience. They had effective
associations for the protection of their interests and were usually
the leading members in the International Conferences.
The other half of the ocean-going marine, the tramps, were
under a much more varying management. They were owned by
several hundreds of companies and individuals, ranging from
wealthy and old-established firms to individual owners of single
ships.
As far as contact with the Government was conc^ned, the
official departments were, for certain purposes of negotiating rates
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SfflPPING AND THE FREIGHT RIARKET 11
or general agreements, able to deal with collective organizations
such as the Liverpool Steamship Owners Association or the con-
ferences of companies dealing with particular trades, and in the
case of tramps, with such associations as the Chamber of Shipping.
In general, however, for the current conduct of business the
Department was dealing with ownership units, that is, with some
score or so of companies for liners and several hundreds for tramp
steamers.
Fortunately, when the war broke out, the shipping of the world,
and British shipping m particular, was in a better position than
it had ever been to bear the great strain which was to be imposed
upon it. After a long period of relatively low freights and profits
the demands of the world for sea transport had suddenly become
lai^dy in excess of supply in the years 1912 and 1913. The con-
sequence was that shipping companies were in a good financial
position and had placed abnormally large orders with the ship-
building yards. By the middle of 1914 the increased building had
already overtaken the demand. Shipping was again in excess of
the demand upon it and freights were falling. There was therefore
a margin of easily acquired tonnage, and the large building orders
placed during the previous year continued to be a valuable offset
against the losses of the first year of the war.
The Freight Market
The allocation of the world's tonnage to the world's needs is
normally effected by the intricate but automatic process of the
freight market.
In general, the minimiun and constant requirements of trans-
port from one country to another are met by the regular liner
services, and these are supplemented, when a new or seascmal
demand arises for more transport, by the interchangeable tramp.
It is in the tramp rates that the variations in demand are most
quickly reflected, and it is by the rise and fall of these rates that
discrimination from month to month between the cai^oes to be
carried and those to be left behind is mainly effected. Each rise
excludes from the market some cargoes which cannot pay the
price and each fall brings in s<Mne new marginal demand. The
same process operates rather more slowly and less exactly with
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12 ECONOMIC SYSTEM AND THE WAR PROBLEM
the liners, which maintain their scheduled rates for long periods.
In the long run, however, the general course of the freight market,
operating primarily through tramp charterings, is reflected also
in liner rates ; and the general process may be described without
further distinction between the two classes of ships.
All over the world the merchants estimating the demands
of their own particular markets in wheat, in wool, in coal, in
cotton, make their purchases and then look round for the freight
to carry them. Some are able to wait, others must ship at once.
Knowing the elasticity and the nature of the consumers' demands
for their own commodity and the nature of their contracts, some
are prepared if necessary to pay an increased rate for transport,
others prefer to cancel or postpone. Each gives orders to his
agent on the freight exchanges of the world, such as the Baltic
in London, to bid for tonnage within specified quantities, dates,
and rates. Similarly the owners of disposable tonnage give in-
structions to their brokers on the same exchanges to accept
within specified conditions the best offers available. So the
haggle of the market excludes the marginal need and allots the
available tonnage in exact accordance with the relative strength
of the economic demand. Exactiy what the world most wants
(as measured by the price it is prepared to pay) is transported
up to the limit of the total carrying capacity. What is left behind
is exactiy what the world least wants (as measured by the price
it refuses to pay).
The important feature to note in this system, before we examine
the way in which ^t was replaced by an entirely different one,
is that it secures the allocation of shipping to suppUes by an
automatic process and without requiring any comprehensive
survey of the world's needs.
Let us suppose for example, that at a given time the overseas
tonnage of the world is on its ordinary routes capable of carrying
say 300,000,000 tons and that expanding trade creates a demand
for the transport of an extra 100,000,000 tons. To some extent
the quantity actually carried will be increased. The extra
demand for freight will force rates up. Merchants who find
freight a bigger item in their cost will find it pays them to buy
in nearer markets — wheat in America for instance instead of
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SHIPPING AND THE FREIGHT MARKET 13
Australia. Tramp steamers will be taken off the distant routes
and go into the Atlantic and on the shorter voyage will carry
more in the year. Under the attraction of the higher freights
some old vessels previously laid up will be brought into service ;
vessels under repctir will be patched up. To some extent railways
and other inland transport will carry the goods previously taken
coastwise and so release a few of the bigger coasting vessels for
the overseas work. Ultimately extra vessels will be built and the
total tonnage will be increased till it meets the new total demand.
But this is a long process, only slowly operative.
Suppose that the effect of the above processes has been to
increase transporting capacity by 20,000,000 tons. We are still
left with an excess demand of 80,000,000 tons ; 320,000,000 only
and not 400,000,000 can be carried. The selection between these
competing demands on transport is then made simply and auto-
matically by the rise of the freight under the stimulus of com-
petitive bidding. The merchants in markets which are least able
to bear an increase in rates lose their transport and wait till the
situation is easier. And the process is continued through thou-
sands of calculations of different market conditions, and without
any survey of the whole situation, until the adjustment is effected.
This is what happened in 1912-13 for instance when the demands
for tonnage were exceptionally heavy. Tramp profits, which had
averaged less than 5 per cent, for ten years, rose in that year to
26 per cent.
All that the system needed in order to allot the transport
exactly to the supplies for which there was the strongest effective
demand was that the offers of merchants with goods and of owners
with ships should be brought together in the big freight markets
such as the Baltic in London or the Collier exchange in Cardiff.
The brokers in these exchanges would know the current freights
offering in their own line of business, and something about the
seasonal changes likely to raise or lower them in the near future.
A good broker would perhaps have a flair for any new or excep-
tional circumstances, even outside his own special market, which
might be likely to influence rates. Neither broker nor merchant,
however, except in the most superficial sense, determined the
rates or the allocation of the ships. They were only the instnunent
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14 ECONOMIC SYSTEM AND THE WAR PROBLEM
through which the economic demand of the world effected its own
adjustments. They did not know — ^they did not need to know —
no one needed to know — ^what were the total demands of the world
or of any particular country, how these compared with the total
transporting capacity of the available tonnage, still less what
was the intrinsic importance of the different suppUes competing
for tonnage measured in terms not of money but of the public
interest. We shall see therefore that when the freight system
was broken by the pressure of the war, and it became necessary
to allot transport on a deliberate judgment of the relative im-
portance of different supplies, the problem could not be simply
solved by tiuning it over to experts — ^for such work there were
no experts.
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CHAPTER III
PRIVATE ENTERPRISE AND PUBLIC CONTROL
The essential feature of the nonnal economic system. It works itself and
needs no control. This is true even of finance. Defects of the normal system
under war conditions. Inadequate production and distribution. The large
proportion of persons devoted to ^ marketing ' and not *' making '. The achieve-
ments in production of the Control System. Objects and forms of Control.
Lack of expert knowledge avaOable for the new Control System.
The Normal Economic Process
•
Like the freight market which forms part of it, the normal
economic system works itself. For its current operation it is
under no central control, it needs no central survey. Over the
whole range of human activity and human need, supply is adjusted
to demand, and production to consumption, by a process that
is automatic,! elastic, and responsive. Wherever the supply of
any article is less than the demand, the price rises ; the consumer
lea^ willing or least able to pay withdraws his demand, and
a little later the prospect of higher profits attracts more work
to production. So both production and distribution are adjusted
by a mechanism which registers and expresses the actual desires
of the myriads of consumers themselves, and not by the individual
decisions of a few who judge between those desires and, in accord-
ance with that judgment, direct. This process under primitive
conditions of society operates separately and independently in
numberless small areas. But the range extends as widely as
transport and political relations permit the transference of labour
and of the product of labour. And under modem conditions we
find the process working, with a range extending throughout the
civilized world, in the production and distribution of most com-
modities which can be easily transported and do not quickly
perish. Some of these, such as wheat, cotton, and wool, are in
such universal demand, are so transferable in character and so
comparatively simple in quality, that we find the normal process
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16 ECONOMIC SYSTEM AND THE WAR PROBLEM
of individual bargains expanding into the mechanism of a few
central markets, in which the demands of a whole world are
registered and adjusted with the world's production. In these
great markets demand and supply are abstracted from the millions
of individual transactions on which they depend. The specialists
in them see the economic life of the world in their particular
sphere simplified and intelligible. But though they can survey it
they do not in any real sense control it. When for a time they do
so — ^when there is a comer in wheat for example — ^it is through
some defect or abuse of the normal system. It is the distinctive
feature and signal merit of that system that under it the multitu-
dinous economic activities of the. world are, so to speak, democra-
tized. They govern themselves with all the liberty and elasticity
and variety of freedom. The few intelligences at the central
points of the system do not rule ; they have no more than a
delegate power ; they register, they express, and, at most, they
give effect to what they represent.
The System of Finance
The semblance of central control is greatest in finance, where
the economic process is most completely abstracted from the
activities on which it depends ; but it is still a sanblance only.
The system of finance, like the freight market, is the creation
of no constructive brain and requires no constructive brain to
work it.
In his interesting novel. The Gossamer Wehy Mr. G. A, Bir-
mingham has pictured vividly and accurately the delicate web of
international finance whose slender threads control the massive
movements of world production and commerce. He adds to this
picture, however, the romantic illusion that at the centre of
this web, silent, vigilant, and omniscient, there are a few super-
human intelligences whose wisdom has constructed and still
controls the economic life of the world. There are no such Olym-
pians. This intricate system has been built and is maintained
by the work of thousands of men, of keen but limited vision, each
working within his own special sphere, each normally seeing and
knowing only his own and the immediately adjacent territory.
From time to time, indeed, one leaps above the shoulders of Ids
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PRIVATE ENTERPRISE AND PUBLIC CONTROL 17
fellows and for a moment snatches the advantage of a more
extended view. Usually it is for a brief period; usually the
range of vision, while wider, is still restricted ; often it loses in
detail more than it gains in range. For the most part the system
has constructed itself from the separate work of specialists who
built better than they knew. Those who have made the system
have normally not understood it ; those who have come nearest
to understanding it, the academic economists, have not con-
structed it and do not direct it. Since the rude shock of war
broke this machine the world has been looking for the supermen
who made it and controlled it, for those who understand it both
in its basic principles and its infinite detail, and could therefore
refcishion and remodel it to the new conditions. It has not found
them. They do not exist. The system will doubtless readjust
itself as it originally grew, but paioiully, slowly, and expensively.
The change will be more like the adaptation to a new environment
in the process of natural evolution than the alteration of a deliber^
ately constructed machine.
Defects of the Peace System under War Conditions
It was thus of the essence of the peace economic system that
it was under no deliberate direction and control.
By the exacting criterion of war conditions, however, this
system proved to be, at least for those conditions, seriously in-
adequate and defective.
By the new standards it was blind and it was wasteful. It
produced too little, it produced the wrong things, and it dis-
tributed them to the wrong people. It is worth while considering
for a moment each of these defects.
The peace system produced too Uttle. It is true that it had
the advantage of the spur of individual enterprise and individual
profit. But in its actual working the exact adjustment effected
by the economic process to the individual taste of the consumer
and to the strength of his economic demand proved to involve the
€dlocation of an enormous proportion of work to what may, in
its widest sense, be called distribution as distinct from production.
The economic system, surveyed suddenly from the central stand-
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18 ECONOMIC SYSTEM AND THE WAR PROBLEM
point of State control, was seen to be swarming with middlemen
of every description whose work was not to produce but to dispose
of what was produced. In the whole system marketing occupied
a disproportionate place as compared with making. Whatever
the need for the diversion of so much productive power to non-
productive tasks under the conditions of peace, a very much
bigger allocation to production was possible in war. In war the
excess of demand over supply disposes of the marketing problem.
The State knows what it wants and can produce in mass. It can
in a day decide upon an order equal to the individual orders of
hundreds of thousands of separate consumers which would require
the emplo3rment of thousands of middlemen and other distributing
agents. And the commodities which have to be distributed to
the civilian population are necessities of life, for which at such
times the demand always exceeds the supply. The difficulty is
therefore not to dispose of the goods but to ration them fairly.
Under these special conditions of mass orders by the Government
and a pressure of denmnd from the civilian population, which
removed the problem of marketing, the economies of central
control proved enormous.
And if the ordinary economic system produced too little it
also produced the wrong things and distributed them to the wrong
people. Production and distribution were adjusted under that
system not to essential need but to effective economic demand.
Under the new standards of necessity, however, it could no longer
be assumed that real importance was measured with sufficient
precision by purchasing power. It bec€une impossible for the
poor to be left to express the importance of their own need for
bread by outbidding the rich. So long as wheat and the ships
to carry it are abundant the rich man's power of economic demand
does not mean starvation to the poor man. He does not consume
a hundred times more bread because his income is a hundred
times greater. A point of surfeit is reached and the poor can
still buy the bread they want. But once wheat or the other
necessities of life or their means of transport are reduced to a bare
sufficiency, the tolerable inequalities of the ordinary economic
system pass the point of endurance. If there is only bread enough
for bare physical needs and not for the full appetite, the un-
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PRIVATE ENTEKPBISE AND PUBLIC CONTROL 19
restricted economic haggle will involve surfeit here and starvation
there. It was to meet these deficiencies of the normal system
that the new methods of State control were graduaUy introduced.
The Experience of the War
There is probably no task at this moment which more deserves
the attention of professional economists who will approach the
problem in a purely scientific spirit, without bias either for or
against the general principle of State control, than an investiga-
tion of the actual results of the war period.
The prima facie facts with which they would start are indeed
so striking as to constitute at least a challenge to the normal
economic system. It is true that several factors contributed to
the results ; the work of women and others not formerly engaged
in production, the cessation of many forms of capital con-
struction and of saving for increased investment abroad, &c.
An unbiased professional inquiry would assign full weight to
these and other factors, but would probably find much still to
the credit of the new methods of organization.
The success of these methods under the conditions of the war
is indeed beyond reasonable dispute. At a moderate estimate, and
allowing for the production of persons who were idle before the
war, between half and two-thirds of the productive capacity of
the country was withdrawn into combatant or other war service.
And yet throughout the war Great Britain sustained the whole
of her miUtary effort and maintained her civiUan population at
a standard of life which was never intolerably low, and for some
periods and for some classes was perhaps as comfortable as in
time of peace. She did this without, on balance, drawing any aid
from other countries. She imported, on borrowed money, less
from America than she supplied, on loaned money, to her AUies.
She therefore maintained the whole of the current consumption
both of her war effort and of her civilian population with a mere
remnant of her productive power by means of current production.
The only exception to this general statement is the extciit to which
she used up existing capital ; and she only did this in so far as
foreign securities were sold and the net real capital of the country
02
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20 ECONOMIC SYSTEM AND THE WAR PROBLEM
deteriorated (in the form of unrepaired and unrenewed houses,
roads, railways, &c.) to a value exceeding any gain through new
capital and plant constructed in the war and still remaining
useful after it. The loans she raised from her people are, of course,
no deduction from this general statement, as internal loans merely
represent a method of taxation and not a method of doing what
is essentially impossible, that is, making the production of a later
age available for the consmnption of the present. The general
and amazing fact therefore remains, without essential qualification,
that with more than half her productive capacity withdrawn.
Great Britain met the scarcely diminished necessities of her
civilian population by current production.
Such an inquiry into the actual results of the war control
might be followed by another of equal interest. The most extreme
individualist will admit that control is not equally injurious in
all cases ; the most extreme Socialist will not contend that it is
in all cases beneficial. But no one has yet studied fully, in the
light of the war experience, in what trades and under what con-
ditions the advantages of control and of private enterprise respec-
tively are greatest and their disadvantages least. The main issue
between public and private management will doubtless be deter-
mined by factors other than those which the scientific economist
can consider. But for a long time to come some areas of the eco-
nomic life of the country will probably be, as at present, under each
form of management. It is at least common ground between the
disputants that so far as socialization is introduced it should be
where its admitted advantages are greatest and its admitted
defects are least. A scientific attempt might therefore be use-
fully made to arrange trades and industries in an order of priority
which would indicate in which spheres, and under what con-
ditions, each system shows its best results.
Most of the main principles on which the work would proceed
are obvious enough. Where the development of a trade, under
free conditions, has in fact resulted in a practical monopoly, so
that the public get the benefit neither of competitive prices nor
of controlled profits; where competition, while still effective,
takes the form of attracting the customer through methods which
really do not benefit him (such as competitive advertisement.
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PBIVATE ENTERPRISE AND PUBLIC CONTROL 21
costly offices and shops, the appeals of commercial agents, &c.)>
instead of through reduction of price or improvement of quality —
private enterprise is clearly at its worst.
What exactly are these trades and industries under present
conditions ?
On the other hand the advocates of control will probably admit
that its advantages are least where the development of an enter-
prise of public value requires experiments, involving sometimes
loss and sometimes gain. For this there are several reasons. We
will mention one.. No one who was intimately acquainted with the
great war administrations will contend that initiative, enterprise,
and constructive ability are in fact only developed in a business
training. But no official who knows the whole temper and
character of public and parliamentary criticism will contend that,
under peace conditions, experiment and enterprise with risk are
likely to be adequately encouraged in public work. He knows
too well the essentially negative attitude of that criticism, its
tendency to concentrate on mistakes and to ignore successes, to
attach more discredit to the loss of £100 than credit to the gain
of £100,000. He knows that the effect is alnlKst always to en-
courage the safe course and the avoidance of all risks. He knows
that the official who retains enterprise and initiative does so
only by consistentiy resisting the natural effect of the attitude
of those who charge him with the lack of it. This attitude may,
indeed must, be altered if the State is to manage any form of
enterprise successfully; but in any near future it is scarcely likely
in time of peace to encourage experiment and enterprise as the
private system does.
What in present circumstances are the trades and industries
where for these reasons public control would probably be seen at
its worst?
The further question as to the times and conditions in which
an extended measure of public control may be relatively advan-
tageous is more difficult. In the transition from peace to war,
and for the special conditions of war, control is clearly desirable ;
in the transition from war to peace, and for peace requirements
during such a period, the answer is more doubtful. One comment
may, however, be permitted. The main test of any system must
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22 ECONOMIC SYSTEM AND THE WAR PROBLEM
be production. The need for increased production was preached
to the workers, and rightly preached, throughout the year 1919,
from the Supreme Council's Manifesto of March to the Report of
the Brussels Conference in October. Before the end of the year,
however, production was declining, not through any slackness
in work, but through difficulties of marketing at the ruling prices.
A system which, however effective under normal conditions,
arrests the production of goods of which the whole world is in need,
must expect to be challenged unless it can find its own solution
and meet the essential test of maintaining production at its
maximum.
The New Control System
Under the special conditions of the war, at least, the normal
system quickly proved inadequate. It failed to respond with
sufficient speed to the imperative need for intensive production,
for fair distribution, for selection between the essential and the
unessential. Within a year the delicate and intricate machine
by which supply and demand had been balanced and adjusted
was smashed an9 lying in fragments. In its place the con-
structive brain had to build, and build rapidly, something which
would take its place; to attempt a deliberate survey of needs
and resources ; to measure the relative importance of munitions
beyond a certain amount, against food beyond a certain amount,
when more of both were wanted, but through deficiency of pro-
duction, finance, or transport, more of both could not be obtained.
So, one by one, most of the necessities of life were brought under
control, their purchase curtailed, their transport measured and
allotted, their prices fixed, their consumption rationed. Little
by little, but on the whole with an astonishing rapidity and
success, a new and deliberately constructed control system ex-
tended its grasp over the whole economic life of the belligerent
countries. By comparison with the intricacy, the complexity,
and the elasticity of the system it replaced, it was perhaps clumsy
and rigid. But the new system could alone have made daily
existence and the continued effort of the war possible, in face of
the new and tremendous fact that more than half the productive
effort by which civilian Ufe is ordinarily maintained was with-
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PRIVATE ENTERPRISE AND PUBLIC CONTROL 2»
drawn for the new work of the war, leaving the scarcely diminished
necessities of that life to be met by the remnant.
And for one part of this novel and immense problem there was
no expert knowledge to draw upon. No one in the world had the
knowledge required by the new system to weigh the competing
claims of food, of raw materials, of munitions ; to decide up to
what point each should be met at the expense of the others ;
and in accordance with his decisions to direct and determine.
For this new task the skill had to be developed, the experience
acquired, the organization improvised.
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CHAPTER IV
THE SHIPPING PROBLEM AND ITS SOLUTION— IN
OUTLINE
RequiBition for Govemmeiit Requirements. Prohibition of Imports : its
advantages, its defects. Emergency measures. Control of Commodities. Selec-
tion of Imports by Allocation of Ships. The National Solution. The Allied
Solution.
Requisition foe Goyebnment Requibements
The methods of peace were soon found impossible in war. Let
us sketch in the briefest outUne the mechanism described later
in greater detail, by which ships were allotted to their cargoes,
by which some supplies were preferred and others rejected, when
the shortage of tonnage became much too serious for the adjust-
ment to be left to the operation of the freight market.
When the war broke out the normal freight system was at once
modified by the use of the power of requisition. In peace the
Government had gone into llie market for the tonnage required
to supply the Fleet and for the carriage of drafts and troops, just
as the private merchant did. But from the outset of war, it took
the tonnage it wanted for naval and military requirements under
onnpulsory powers and paid for it at rates which were fixed and
kept stable without regard to the open market.
Outside these requirements, however, the peace system con-
tinued. The only direct effect of Government requisition was to
eliminate the new war demand and the corresponding ships from
the freight market. The total excess of demand, which was
mainly caused by the absorption of these ships for war purposes,
remained to be adjusted on the civil requirements through the
operation of rising freight rates.
This policy, which was administratively the only pra;Cticable
one at the moment, soon required modification as the pressure on
tonnage increased, and the rates therefore rose higher and higher.
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THE SHIPPING PROBLEM AND ITS SOLUTION 25
The reaction of the high rates on the cost of materials, on the cost
of living, on wages and on the public temper, and the dislocation
caused by the consequent adjustments, became too serious to
ignore, lb addition, essential supplies not only had to pay a higher
price, but they were often excluded by the competition of less
essential things. It became impossible after a tune to assmne,
because there was a stronger economic demand for barley for
brewing than for wheat for bread, that the importation of the
barley was more necessary to the country than the bread ; but
under this system it was the barley that came in.
Prohibition of Imports
Attempts were first made to assist, without replacing, the
freight market system by reducing the excess of demand over
supply (and at the same time to reduce the strain on foreign
exchange by restricting foreign purchases to essentials), through
a deliberate restriction of imports. Certain imports were pro-
hibited altogether ; others were admitted only under Ucence, and
when the imports reached certain limits, licences were refused.
This poUcy had in principle the great advantage that it could
be applied just so far as the available knowledge and organization
allowed, and that in so far as it was apphed it gave relief to the
situation. It did not necessitate as a prior condition a complete
survey of the whole problem ; it did not throw on the Govern-
ment the immediate responsibiUty for taking decisions covering all
imports comprehensively and in detail. It left the peace system
in force to effect the selection of all imports not excluded by pro-
hibition or admitted by Ucence ; but it left it with a diminished
task ; the excess of effective demands over the tonnage, and the
force driving up freights, were reduced. For it is not demand in
itself that affects rates but only effective demand. A man may
desire to import American motor cars, but if their importation
is prohibited his demand never gets into the freight market and
never affects freights.
The system had the additional advantage of placing the re-
sponsibility for choosing between different supplies on persons
whose special task it was to study and know their relative impor-
tance, instead of leaving it to shipping authorities, whose first
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26 ECONOMIC SYSTEM AND THE WAR PROBLEM
preoccupation was with the practical problems of ship manage-
ment and who tended to be somewhat smnmary in their methods
in dealing with supplies.
Moreover exclusion by prohibition gave longer warning. If
the import of an article was not prohibited, but was in fact
excluded through shortage of shipping, the merchant would have
bought in the producing country ; he would have competed for
freight, and, though he did not obtain it, his competition would
have forced up the rates for other merchants. The exclusion
being thus at the last stage, the trade would have had no oppor-
tunity of making the necessary adjustments. The merchants,
the retail trade, the manufacturers, would find themselves faced
with a sudden, a)id unforeseen, shortage which would dislocate
their arrangements. If, however, the import was prohibited, the
merchant did not buy it in the country of origin ; he was not
a competitor for freight ; the trade adjusted itself to its absence.
Had it been possible to frame and enforce programmes of
import prohibition on a sufficient scale to leave no excess of re-
quirements over tonnage available, the problem would have been
solved. Shipping would have resumed its proper r6le of looking
for its employinent, of being servant and not master of the supphes
it carried.
This was an ideal pursued with diminishing success in the first
two and a half to three years of the war through the mechanism
of Board of Trade prohibitions and of committees for the restric-
tion of imports. By the autumn of 1915, however, it was already
clear that, useful as this method was, and real as had been its
success so far as it went, it required to be supplemented by further
action.
The defects and limitations of the system were indeed very
serious. It is extremely difficult to find any commodity which
can be cut out clean from the supply system of a country. If
imported furniture, for example, is prohibited, more furniture
is made at home ; the furniture makers compete for the timber
that would otherwise be available for military "or munitions work,
and the consequence soon is that extra timber is imported on the
unquestionable ground that it is wanted for miUtary purposes.
If barley for brewing is excluded the brewers will buy the home
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THE SHIPPING PROBLEM AND ITS SOLUTION 27
barley that would otherwise have gone to feed pigs or been used in
the manufacture of munitions, and an extra demand for imported
barley will be made on the unquestionable ground that it is wanted
for munitions or the essAitial meat supplies of the country. More-
over, few things can be totally excluded, and the saving effected
by their exclusion is quite inconsiderable. Much the bigger saving
is made by hmiting the quantities of imports, and that means
licensing certain merchants' demands and refusing others. But
so long as the manufacture in question is uncontrolled and the
manufacturer is able to obtain a competitive price for his article,
the early comers who obtam their licences find that they have
obtained a very valuable and indeed saleable article. The licence
given without charge by the Government acquires a value from the
fact that the supply is much less than the demand. The advantage
of the reduction in effective demand on the freight market never
gets through to the consumer in the form of reduced prices but
stays in the hands of the merchant, manufacturer, or middleman.
The next limitation is psychological but perhaps the most
important of all in its effects. Those who administer the licence
system are constantly impressed with the very real importance
of the interests and industries whose continuance is dependent
upon the particular import asked for. This is an immediate and
obvious thing always before their eyes. They have not and cannot
have as clearly before their minds either the shipping situation
as a whole, or the importance of the necessarily unknown import^
which in the last resort will be excluded through the fact that the
import they are considering is admitted. They do not, and cannot,
realize the consequences of the higher prices of all the unports
which still continue to come in at a higher rate because they have
had first to outbid one more competitor. In addition, those who
manage such a system, if they are to have the expert knowledge
required, will almost inevitably have obtained their standards
and general perspective from peace experience and will find it
impossible to adjust these with sufficient rapidity to the new
necessities created by such a factor as the submarine. When,
therefore, the problem was looked at from the point of view of
supplies without any very close relation with the department
dealing with ships, it was always found impossible, by prohibition
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28 ECONOMIC SYSTEM AND THE WAR PROBLEM
or by licence, to effect more than a small and diminishing propor-
tion of the reduction necessitated by the tonnage position. In
1916, when the Shipping Control Committee suggested meeting
the reduction in tonnage by prohibiting^imports at the rate of
13,000,000 tons per anniun, tiie maximum plan of prohibition
thought possible was 4,000,000 tons and the actual amount reduced
under this plan less than 2,000,000 tons. This left the great bulk
of the necessary reduction to be effected in 1916-17 as in 1914-15
by the ordinary system of the rising freight market. Prohibition
of imports occupied a much more important part in the adminis-
trative measures of America during the war. In the United
Kingdom, however, it only touched a part of the problem. It
helped but it did not solve. It was never the chief method.
Emergency Measubes
From the middle of 1915, therefore, the ordinary method of
the freight market, assisted by import prohibition, was visibly
becoming inadequate. One after the other, essential parts of the
economic system proved incapable of adapting themselves to the.
necessities of the situation, and threatened the country with
imminent and fatal disaster. Now the bunker depots of the world
(on which all shipping was dependent) would be threatened with
depletion. Now the wheat imports would be endangered. Now
some essential raw material would be missing. No central survey
of any of these vital supplies was made during peace or the earUer
period of the war. Large numbers of merchants would consider
the probable demands and profits of their own particular markets
and make their own arrangements without any comprehensive
plan or programme. With freights jumping as they did in 1915,
the risks became too great for this merchant or that ; he failed
to buy or charter ; and at the last moment the Government (which
had accepted no general responsibihty for the supply in question)
would be faced with a grave emergency. These emergencies were
for a long period met, in the British manner, by improvised
solutions, each meeting the need of the moment, but faiUng to
prevent the recurrence of similar difficulties ; each continuing
while it was useful and being terminated or supplemented
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THE SHIPPING PROBLEM AND ITS SOLUTION 29
when it proved useless or inadequate ; but each leaving some
permanent contribution towards the complete system ultimately
evolved. '
In a number of cases the department entrusted with the duty
of requisitioning ships for war purposes (the Transport Depart-
ment of the Admiralty) used its control to force vessels into
a threatened import service (see p. 63, bunker stations) or favoured
the more important conunercial imports when deciding the con-
ditions on which vessels requisitioned to carry an outward cargo
of coal were released for a return voyage (see p. 62).
By the autimm of 1915 more ambitious methods were re-
quired. A committee, the Requisitioning (Carriage of Foodstuffs)
Committee, was appointed by the Board of Trade to assure the
suppUes of wheat (see p. 51), and in conjunction with the Trans-
port Department it compelled (under power of requisition) owners
of specified vessels to charter them for the carriage of grain, the
ships being chartered in the market in the ordinary way. This
was successful in providing the required tonnage, and the extra
supply so made available brought down the freight rate for wheat.
Obviously, however, both results were obtained at the expense
of other imports and without consideration of the relative claims
of these imports. The device was, therefore, in its nature, of a tem-
porary character, only justifiable so long as wheat clearly needed
more help than other suppUes.
At the same time (November 1915) another and temporary
and partial, but within its limits, very useful committee, was
appointed — ^the Ship Licensing Committee (see p. 49) — ^to
control the employment of unrequisitioned British ships by
licence. This Committee refused Ucences to ships engaged in
clearly unnecessary, or relatively unimportant, work. This cer-
tainly gave some relief to the situation and assisted, without at all
interfering with, other forms of control. The pressure, however,
increased too rapidly to be met by this form of reUef, and the
Committee's work was automatically reduced as the Govern-
ment extended its responsibiUties over successive civilian
imports and as a consequence conveyed them in requisitioned
tonnage.
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30 ECONOMIC SYSTEM AND THE WAR PROBLEM
Control of Commodities
Real progress was by this time b^ing made in a direction
of much more importance. The Government, for reasons un-
connected with shipping, gradually took direct control of the
acquisition and distribution of the main articles of food and raw
materials of the country. The most important of these controls,
included the combined purchase of the whole supplies of the
commodity in question, sometimes to be resold to middlemen
or manufacturers for mtemal distribution, sometimes remaining
Government property throughout, but in either case being impor-
ted for the Government and not for the pnvate merchant. It
f oUowed as a natural consequence that the demands for transport
of these supplies were included in the demands made by the
respective Government departments upon the Transport Depart-
ment, the War Ofl&ce for example asking for the transport to
England of so much wool, which it had purchased in Australia, just
as it asked for the transport to France or Mesopotamia of so much
clothing, which had been made under its orders in England. It
would have been possible, of course, for the War Ofl&ce to have
chartered space for wool, &c., just as the private merchant did
(and in some minor instances this was done) ; but it was obviously
more convenient for a department which had no great experience
of chartering, and had its hands full with other work, to €isk the
expert shipping department to arrange the freight. It was also
much more economical, for if supplies came in requisitioned
tonnage they came at ' Blue Book ' rates (see p. 43), while private
rates rose rapidly till they became six times as expensive.
Selection of Imports by Allocation of Shipping
This development did not, however, solve the essential problem
of deciding what was to be transported and what was to be left
behind when shipping was inadequate or (more important at
first) what should be bought and what forgone when foreign
exchange was inadequate. On the contrary, the mechanism by
which this decision, with whatever expense and waste, had been
before effected, was now destroyed. The ordinary system ex-
cluded the excess demand by letting the prices go up till sufficient
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THE SHIPPING PROBLEM AND ITS SOLUTION 31
customers refused to pay and withdrew their demands. But the
Government was now the single customer and consumer and the
most important competitor for transport. It had to determine
itself » after a deliberate survey, how much wheat, how much sugar,
how much timber, it would have, when it could not have all it
wanted of them all, and prices were no guide. The change of
control did not therefore solve the problem ; it made its solution
more urgent.
The responsibility for selecting imports thus fell upon the
Government and the Government alone. And as we have seen,
at the most acute period, shortage of tonnage was more serious
than shortage of finance. In deciding what to import, the basis
of the problem was not how much could be bought — ^but how much
could be transported. In the absence of other arrangements,
therefore, the selection was necessarily made by the executive
orders given to shipping by the shipping authorities.
It must be remembered that sea transport is almost as
transferable as money itself. In spite of great variety in type
and construction, ships, or at least the cargoes which can be
carried in a mercantile marine under one authority, are astonish-
ingly interchangeable. Once the importing programmes and the
shipping of a country, or a group of countries, are brought together
imder one control, it is possible, with time and organization, so
to arrange them that an economy in one supply can be used
to increase the means of transport of practically any other
supply.
It is true that a heavy cargo, such as nitrates, caimot without
loss be loaded in a measurement vessel built for oats. But if
a given quantity of oats can be dispensed with, space is released
in another vessel which can indifferently carry either oats or
a variety of other articles, and so, directly or indirectly, perhaps
through a chain of half-a-dozen interchanges, the economy
obtained in oats may be used to transport the nitrates. The
general fact of interchangeability (subject as it is to innumerable
difficulties in time, in place, and in practical arrangement) was and
remained a fundamental fact in the construction of the central
shipping programmes, first of the several Allied countries and
then of the Allies acting in conjunction. It constituted at once
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32 ECONOMIC SYSTEM AND THE WAR PROBLEM
the great advantage and the most difficult problem of those
entrusted with the control of ships.
When some new demand was made on the inadequatie shipping,
the questions were always asked : ' Is it really impossible ? ' or
' If fiiis new demand is met, what will go short ? ' It was never
possible to answer ' no ' to the first or give an exact answer to the
second. To ask such questions is like asking a man who is already
spending more than his income, is tmable to borrow, and is still
going without much that he wants, whether some new expense is
really impossible, or what would have to be given up to meet it.
Of course, he never knows, if he incurs it, whether his boots or a
much-needed overcoat or anything else within his total range of
expenditure will ultimately have to be sacrificed. It was just as
impossible when additional transport was asked for one supply,
to say which of the other supplies would be affected.
With cargoes so interchangeable, an alteration in any part of
the shipping programmes under one authority at once reacted
upon every other part.
The central programmes of sea transport, which gradually
became amalgamated till towards the end they were almost
a single progranune for the whole of the AUies, were thus always
being modified by an infinity of disturbing accidents. There was
scarcely any major event, whether political, military, naval, or
natural, in any cotmtry in the world which did not at once react
upon the tonnage position. The Russian Revolution, the entry
of America into the war, any proposals to redistribute military or
naval forces, the failure of harvests in AUied or neutral countries,
a severe frost in North America, a military disaster or success, at
once changed the central tonnage programmes. Each supply
department had to face its own risks, and make its own aUowance
for unforeseen accidents. The food ministries had to reckon with
the possibility of failures in harvests, the mxmitions departments
with strikes or sudden changes in the character of warfare, the
military authorities with all the changing chances of war. But
the shipping authorities had to be constantly forming a programme
and laying their plans with the knowledge that they were subject
to reactions from the cumulative tmcertainties of all other depart-
ments put together.
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THE SHIPPING PROBLEM AND ITS SOLUTION 83
The National Supply Departments
The allocation of shipping, and therefore the selection between
imports, were in these circumstances too heavy a responsibility,
and an improper responsibility, for any shipping authority to bear.
The organization described in this book was essentially one
designed to transfer a part of the responsibility to those best
qualified to bear it.
With this new system a constantly l€u*ger proportion of the
responsibility fell upon the supply departments. If the assump-
tion of control of supplies by the Government did not solve the
problem, it gradually developed the organization necessary for
its solution. In all the big supply departments specialized experts
from different trades were incorporated in the official machine.*
They, and with their aid the other officials, were day by day in the
course of their current work testing the requirements of each
industry by the criterion not of market prices but of intrinsic
importance in the genertd scheme of national policy. Every
sep€u*ate control was working under the constant pressure of
inadequate finance, inadequate supply, and inadequate transport,
and becoming more expert in distinguishing the essential from
the merely desirable. The separate controls were soon grouped
under a few central authorities — ^the War Office, the Ministry of
Munitions, the Ministry of Food, the Board of Trade — great
departments controlling their own supplies and daily acquiring
more expert knowledge as to their relative importance. The
Ministry of Shipping (into which the Transport Department
expanded at the end of 1916) no longer, therefore, had to deal
with the demands of inniunerable specialized experts in different
industries, nor even directly with a score of separate controls,
but only with a few great central ministries, which presented
comprehensive programmes covering between them practically
the whole range of imported supplies. Ultimately indeed the
crucial competition was between two programmes only — ^munitions
and food.
The responsibility of the Ministry of Shipping in the allocation
of transport, while extending over a wider range of commodities,
was thus shared with the other great offices. It was, however,
1569.33 n
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34 ECONOMIC SYSTEM AND THE WAR PROBLEM
by no means transferred to them. For the total programmes
presented always exceeded the transporting capacity of the ships ^
available and the shipping authority was therefore still left with
a large responsibility for selection. But by this time it had ac-
quired a knowledge both of the commodities and of the personnel
engaged in controlling them which enabled it to exercise an
influence over the formation and execution of all the main
programmes.
By the end of 1917 the problem, as a purely national one,
reached its practical solution in the examination of the big block
programmes, and their reduction to within the limits of the trans-
porting capacity available, by a Cabinet Committee (the Milner
Committee) on which both the supply departments and the
Ministry of Shipping were represented.
Allied Organization
By this time, however, it had become impossible to treat the
shipping problem on purely national lines, supplemented only
by occasioned negotiations and agreements with the Allies.
France and Italy were unable to transport their own suppHes in
their own tonnage and in such neutral tonnage as they could
charter. Throughout the war they had had assistance from
British shipping. It was obvious by the end of 1917 that this
assistance would have to be increased. It was by no means certain,
however, after the drastic reductions in the British programmes
of that time that, obvious and urgent as might be the need for the
extra transport of French nitrates or ItaUan coal, tonnage was
not being used to transport other French or Italian suppUes on
a more generous scale than that of the revised British programme.
^Controls had been established in France and Italy similcu* in their
general character and purpose to those in Great Britain (though
with many varieties of method), but the system in the different
countries were not co-ordinated or capable of comparison. Just
as the Ministry of Shipping was not best qualified for determining
between British wheat and British sugar, but in practice had to
undertake the task until the organization described above was
established, so it was not best qualified for balancing the claims
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THE SHIPPING PROBLEM AND ITS SOLUTION 36
of British sugar against French sugar, but in the absence of any
other authority was in fact deciding between them by its decisions
as to how many ships to sdlow to France.
Obviously the persons best qualified to consider whether
France was consuming more sugar in relation to its vessels than
Great Britain were the sugar experts in the two countries, and
so with the whole range of supplies. Moreover, as the very
disasters of the war made Allied unity at once more necessary and
more possible it became apparent that the essetitial competition
for inadequate shipping was not between British supplies as
a whole, and French or Italian supplies as a whole, but between
Allied mimitions and Allied food.
The nationtd organizations (for the purposes of import, not
of internal distribution) were therefore given an international
character. This was effected, however, not by the formation of
a completely new organization but by the co-ordination of the
severed nationtd controls through internationtd committees and
of the shipping authorities through a shipping council and execu-
tive. Allied programme committees consisting of representatives
from the severed national controls were formed for all the important
commodities (wheat, sugcu*, meat and fats, oils and seeds, nitrates,
hides, wool, flax, hemp and jute, paper, &c.) and submitted their
demands to the new AlUed Maritime Transport Council and its
Executive.
Such in the briefest outline, and with the omission of many
temporary measures and expedients, was the problem, and the
development of the organization to meet it, which will be de-
scribed in the succeeding chapters of this book.
D2
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CHRONOLOGICAL TABLE, AUGUST 1914-MARCH 1918
(This table gives the main events affecting shipping during the first three
and a half years of the war, with references to the pages of the book in wfaidi
they are mentioned.)
1914 PA<»
August. Declaration of War
Expeditionary Force dispatched
Transport of Troops from Dominions begins. ... 89
Proclamation, Requisitioning begins 89
Admiralty Arbitration Board appointed .... 48
War Insurance Scheme brought into control ... 8$
Royal Commission on Sugar Supplies appointed ... 90
Board of Trade buys Frozen Meat for War OflBee and requisi-
tions refrigerated space 44
Prizes seized 45
Local Transport Officer Service instituted .... 42
Blockade Examination Service instituted .... 99
Commission Internationale de Ravitaillement formed . .184
Contraband Committee appointed 99
Blue Book Rates fixed 48
Overseas Prize Disposal Committee formed .... 45
Admiralty Coasting Trade Office formed .... 45
Advisory Committee to Transport Department formed . . 41
Sugar transported in requisitioned tonnage .... 90
Blockade Reprisals Order 100
Blockade Rationing Policy begins 100
Dardanelles Expedition
Italy declares war against Austria
Ministry of Munitions created 98
Bunker Control instituted 104
Ship Licensing Committee appointed 49
Requisitioning (Carriage of Foodstuffs) Committee fdrmed . 51
Port and Transit Executive Committee formed • • . 58
September.
October.
November.
1915
February.
March.
May.
June.
July.
November.
December.
1916
January.
Shipping Control Committee appointed .... 64
Ministry of Blockade formed 101
April Large supplies sent to Russia 140
Russian Revolution
May. British ships in Allied Service restricted to number in service
on April 1 67
August. Roumania enters the war 101
September. Roumania invaded by Germany 101
November. Wheat Executive formed 91
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CHRONOLOGICAL TABLE 1914-18
37
December.
1917
January.
February.
Aprfl.
May.
June.
August.
September.
November.
1918
January.
March.
PAGE
New British Government formed . . . 70
Ministry of Food created 02
Ministry of Shipping created 70
Babington Smith Import Restriction Committee formed • 75
Announcement of unrestricted submarine waifore in War
Zones to begin on February 1, 1917 . • • . 121
Shipping Agreement between French and British Governments 188
Vohmtary rationing introduced ....
Inter-ADied Chartering Committee formed .
Inter-Allied Shipping Committee appointed .
Tonnage Priority Committee formed •
Decision to extend requisitioning over all British ships
Liner Requisitioning Scheme instituted
Intensive submarine campaign begins
Timber controller ai^>ointed . .
Requisitioning of Neutral vessels begins
America enters the war . .
Shipping Losses reach their maximum
Period of Germany^s greatest privations
Large supplies sent to Russia ....
Convoy system begins
Wooden v. steel ships issue in America
Canadian Food Controller appointed •
American Food Controller obtains power to fix prices
Foundation of Hogg Island Yard
Inter-ADied Conference at Paris
100
106
140
75
71
72
121
96
102
79
85
100
140
122
88
98
98
84
151
Compulsory rationing system introduced into Great Britain
(Sugar, Wheat, and Butter) 92
German advance : coal supplies dislocated : channel port
threatened 165
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PART n
BRITISH SHIPPING CONTROL
CHAPTER I
THE FIRST YEAR (1914-15). BEGINNING OF SHIPPING
CONTROL
Gharteiing and Requisition. The Board of Tra^e and the Transport Depart-
ment. Trade Division of the Admiralty. Blue Book Rates. Transport of
Frozen Meat. Employment. of Prizes. Losses and Freight Rates in the First
Year.
The first effect o£ the outbreak o£ war was to paralyse shipping
and to accentuate the depression in freights which had already
begun to result from the large building output of the previous
year. There was the greatest uncertainty as to whether shipping
could be continued under ordinary conditions. The risk generally
or in special areas might prove prohibitive. Naval instructions
as to routes and detention would certainly impede the free move-
ment of ships, systems of convoy might even be necessary, and
merchants were doubtful of their markets. During the first two
months therefore vessels were freely offered to the Admiralty at
economical rates.
This position rapidly changed however. The cwefully worked
out system of war insurance, under which the Government sup-
ported the underwriter by bearing 80 per cent, of the risk, proved
of the greatest value. The early losses showed the risk to be a
measurable one, and in a short time ordinary business dependent
upon ocean transport renewed its normal demands, whUe the new
and rapidly increasing demands upon shipping made by direct
Government requirements forced freights up.
For a time, and after the first brief pause of uncertainty and
fear, the normal supply system of the United Kingdom revived
and continued along its accustomed lines. Merchants continued as
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BEGINNING OF SHIPPING CONTROL 89
during peace to buy wheat, maize, oats, barley, wool, cotton or
timber, and all the imported food and raw materials on which the
normal life of the population and its manufactures depended.
Having bought in the producing country, they chartered freight in
the ordinary way through the Baltic and other freight m€u*kets.
The Government only demanded tonnage for the immediate pur-
poses of the war, for the transport of troops from Australia,
New Zealand, Canada, and India, and for the transport of suppUes
from England to France, or to the Fleet. These demands were
sufficient to afiect the general freight market but not such as to
cause any difficulty in obtaining the ships. There was still an
enormous amount of spare tonnage engaged in employment of a
relatively unimportant and unessential kind which was easily
obtained for the new needs of the war. During the first few months
the Government required only a small number of passenger vessels
for the transport of troops and about 20 per cent, of British ocean-
going tramp tonnage for its supply arrangements.
Relatively small, however, as was this demand upon the then
abundant supplies of tonnage, it was recognized from tiie beginning
that it was impossible for the Government, as in the South African
War, to go into the market as an ordinary charterer. In that W€u*
the transport needed had been comparatively insignificant and the
Government chartered under ordLry compeS terms ^th
other merchants. The result was that they paid rates, and made
the rest of the world pay rates, beyond anjrthing previously known
in shipping history. Taught by this experience, the Government
had prepared to obtain its tonnage by requisition. Simultaneously
with the outbreak of war a Proclamation was issued indicating that
the Crown intended to use the powers of its Prerogative to re-
quisition the ships required for the purposes of national defence,
with due compensation to the owners.
BoABD OF Trade and Transport Department
These new powers of requisition, though not formally confined
to any single authority, were chiefly exercised by the Transport
Department of the Admiralty.
This department, on which the force of circumstances was
gradually to thrust the responsibility for handling the sea transport
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40 BRITISH SHIPPING CONTROL
of all the imported supplies of the country, was humble in status
and small in size. It induded a higher personnel of only some dozen
men, and the annual cost of its whole staff in 1913 was only £14<,000.
Before the wax two departments of the British administration
were concerned with merchant shipping — ^the Marine Department
of the Board of Trade and the Transport Department of the
Admirtdty. Their duties were entirely different both in range and
in character. The first exercised the whole of such general responsi-
bility as was at that time entrusted to the Government with r^ard
to merchant ships. This, however, concerned only the con-
ditions under which the British shipping trade was conducted
and included no control over the character of its employment.
In the interests of safety the Board of Trade determined the
conditions in which vessels must be built, loaded, and fitted
with lifeboats. It made rules as to engagement, pay, and food
of seamen and other such matters, and it enforced these
rules through local marine superintendents at the ports of
engagement.
The Transport Department of the Admiralty, on the other
hand, had no concern whatever with shipping in general. It was
solely responsible for arranging the transport required by the
Government itself, and for preparing plans for its more extended
requirements in time of war. During the trooping season each
year it chartered passenger vessels for use as transports in convey-
ing troops to and from South Africa, India, Egypt, and British
garrisons in other parts of the world. It arranged passages for
officers of the Navy and Army, and for this purpose had detailed
agreements with the main shipping companies. It chartered some
three or four hundred coUiers a year, mostly on single voyage
charter, for the supply of the Fleet and the various naval bases.
It managed a small number of vessels owned by the Admiralty,
including a hospital ship, sonie coUiers, and oil-fuel vessels. In
addition it was entrusted with the duty of making detailed plans
for the transport and supply of the Expeditionary Force and for
the ships required for naval use in w€u* under the naval plans
approved from time to time. The work, therefore, was of a kind
which gave valuable experience of the general conditions of
merchant shipping. It was, however, limited in scale, and its
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BEGINNING OF SHIPPING CONTROL 41
largest section, the ehaxteiing of colliers, was carried out through
local commercial agents at Cardiff and Newcastle.
At the beginning o£ the wm, therefore, as in peace, the responsi-
biUty for any problem affecting merchant shipping as a whole
rested with the Board of Trade. This department was responsible
for taking the initiative in the new measures, and for the estabUsh-
ment of the new machinery required, except when the need €u*ose
directly from the requirements of the Government itself for the
transport of its men and suppUes. In the latter case the responsi-
bihty woidd fall to the Transport Department. Power passed
gradually from the l^ger to the smaller ofl&ce. This, however, was
not due to any deUberate transference of authority. It resulted,
as we shall see, from the general process by which the Government
extended the sphere of its owti direct responsibiUty for the pur-
chase, importation, and consequently the transport, of successive
classes of supplies which in the early part of the war were brought
in under private and commercial conditions.
The Transport Department was organized when war broke out
on the basis of foiu* main branches, a naval branch (which handled
requirements of the Admiralty), a miUtary branch (which handled
requirements of the War Office), a technical branch (which
arranged the fitting of vessels as transports, &c.), and an accounting
branch. It was at the time under a naval Director of Transports.
As soon as the war began, a civilian director was appointed
in place of the retired admired who formerly occupied the position,
and the four branches of the office began at once to expand in
personnel and in niunbers to meet their new work. The depart-
ment was €Jso assisted by the association of an Advisory Com-
mittee of well-known shipowners who both gave the advantage of
their expert knowledge on technical matters and also watched the
methods of the department to see that it was as considerate
of shipowners' interests as the nature of its public duties per-
mitted. It was soon recognized, however, that in spite of the
previous experience of the permanent officials of the department,
and of the expert assistance given by this Advisory Committee,
the amount of technical work involved in the ordinary conduct of
business necessitated the inclusion in the actual executive machine
of persons with direct shipping experience. Shipowners and those
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4& BRITISH SHIPPING CONTROL
engaged in various capacities in the shipping business were there-
fore gradually added to the staff of the different branches of the
office.
For the moment, however, the chief expansion was not in
central but in local staff. Transport officers with clerical and
technical staff had to be appointed at once at all the main ports
of emb€u*kation and supply both in England and France and very
soon in many other piurts of the world. The nucleus of these
staffs had been arranged in peace, but the work soon grew beyond
the anticipations of any previous plan. The Transport Officers
were for the most part drawn from retired naval officers, but later in
the war they were gradually strengthened by the inclusion in their
ranks of many persons of shipping experience who were given
temporary commissions for the purpose. By the end of the war
they were established at nearly a hundred ports in England,
France, Italy, the Eastern Mediterranean, South Africa, and
Russia, and had grown into a big service numbering 900 officers in
addition to civilian staff engaged locally as required.
Trade Division of the Admiealty
One other department whose action affected merchant
shipping from the outbreak of war must be here briefly mentioned.
The Admirtdty was of course responsible for the safety of the seas
and the efficient prosecution of the blockade. So feu* as these
duties required control over merchant ships, they entrusted the
task to the Trade Division. The primary duty of this department
was to detain British ships in port at times of special danger, or
to divert them into safer routes in order to diminish the risk
of submarine loss. In addition, however, it developed an ex-
tensive responsibiUty with regard to neutr€J shipping by
methods which are described in detail in Chapter 11 of Part HI.
In the early months the Transport Department was thus
engaged in requisitioning the vessels needed for Government
service, most of which had been scheduled and marked down for
the purpose before the war began ; in mobilizing and organizing
its local staff of executive officers ; and in general in putting into
execution, in their infinity of administrative detail, the plans which
had been carefully prepared before the war.
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BEGINNING OF SHIPPING CONTROL 4»
Blue Book Rates
For the reasons explained above, no difficulty was at first
experienced in finding the ships required by the Government.
The inunediate problem in relation to requisition, with which the
Transport Department was faced, was to determine the rates of
payment. There is no doubt that at this moment the most advanta-
geous terms could have been made with shipowners, with their
entire agreement, to secure their vessels at rates which would
have meant a saving of many millions to the Government as
compared with those ultimately paid. Proposals were in fact dis-
cussed to work out detailed rates on a gener€J basis of 10 per cent,
profit. These proposals came to nothing, partly because the
great pressure of executive work naturally made the settlement of
rates a secondary matter, and partly because it was not in accord-
ance with the general Government pohcy at that moment to make
arrangements on the basis of the war continuing for a long period.
While the matter was in abeyance, the normal sea traffic had been
resumed, and the additional requirements of the Government had
f orcfed up freights. Profits, and therefore the standard of expecta-
tion of profits, had increased and the opportunity was lost. In the
meantime, the Admiralty Transport Arbitration Bo€U*d had been
appointed to determine any disputes as to the rates of compensa-
tion for requisition. This board was composed partly of leading
shipowners and partly of officials. It formed a panel from which
a small number, usually three, wbitrators were selected by the
president to deal with any particular case. It was found conven-
ient to use this board to advise the Government what scales of
rate to pay without waiting for actual cases of dispute. The
persons composing the panel therefore were formed into a number
of committees to recommend general scales of rates for different
classes of vessels. These rates, published in a Blue Book and
destined to become famous as the Blue Book rates, were, with
some increase for tramp steamers in the following spring, with
a few other modifications, and with some general increase to
represent the extra cost of working in the third year, the standard
rates for the engagement of all- Government tonnage throughout
the war.
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44 BRITISH SHIPPING CONTROL
The rates, which are summarized on page 349, of course varied
with the type of vessel. For the ordinary ocean-going tramp
steamer, engaged on the usual time-charter terms, the standard
rate during the first years of the war was lis. a month on the
gross ton (equivalent to about 7«. on the dead weight). For this
hire the shipowner provided his ship in a working condition, paid
the wages up to their peace level, and bore the cost of marine risk
insurance. The Government found the fuel, bore the war risk, and
paid increases in wages. The rates were somewhat in excess of the
market when they were first introduced in the autumn of 1914, but
were already below it in the early months of 1915. As the market
rates went up, these Blue Book rates proved extremely moderate
by comparison either with the rates paid for ships by the Allied
Governments or with the bargains made by the British Govern-
ment in most other industries.
Teanspoet of Fbozen Meat
The requisitioning power of the Board of Trade is illustrated by
the action taken to secure imported meat supplies.
At the beginning of the war the Board of Trade, at the request
of the War Office, both bought the supplies of Army frozen meat
and arranged for their transport. For this purpose they used com-
pulsory powers, and paid a fixed rate, but the form of requisition
was very different from that employed by the Transport Depart-
ment. Frozen meat is conveyed in the insulated space of vessels
which normally carry both passengers an<^ general cargo. Instead
therefore of requisitioning and managing the whole ship, the Board
of Trade only requisitioned the insulated space. They paid a rate
per forty cubic feet which was intermeciate between the Blue
Book rates and the current market rates of the time. But while
using the insulated space so acquired for the conveyance of the
meat they had purchased, they left the vessels otherwise free to
run on their own accustomed routes and carry on their ordinary
traffic both in passengers and genertd cargo. A principle, subse-
quently of importance, was established almost accidentally under
this form of requisition. The insulated space was not always fully
required for the conveyance of meat, and was therefore available
for such commodities as dairy produce, rabbits, and fruit. These
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BEGINNING OF SfflPPING CONTROL 45
articles, however, were not the property of the Government and
were imported on private accomit. While paying the shipowners
the rates for the full insulated space therefore, the Board of Trade
subchartered freight to the merchants, any profit going to the
Government. This estabUshed a practice which, though attacked
as indefensible in principle, was successfully applied in 1917 over
an enormous range under the liner requisitioning system de-
scribed in Chapter IV.
Employment of Prizes
The British Mercantile Marine received a valuable addition in
the enemy ships captured as prizes or detained in British ports ;
241 ships of all classes of a tonnage of 626,000 were acquired in
this way. Of these, the vessels captured abroad were dealt with by
an ' Overseas Prize Disposed Committee ', who both settied the
technical difficulties included in their acquisition and arranged for
their employment (by charter, sale, or transference to the Transport
Department). The vessels detained in U.K. ports were for the
most part used for coasting co€d work and for that purpose were
managed by a small special office (the Admiralty Coasting Trade
Office) working in conjunction with the Board of Trade.
Losses and Fbeight Rates in the Fibst Yeak
During the first year of the wax the losses, the many delays
incidental to the dispatch and movement of ships under war con-
ditions, and above all the steady increase in the demands for tran-
sport for war purposes, were steadily forcing up the open market
freight rate. The less essential imports or rather — ^for it was
b^pnning to be very tax from the same thing — ^imports for which
the economic demand was relatively less, were being excluded, and
those that secured transport were paying a much higher price for it.
In July 1914 the normal price for a six to nine montiis' charter
of an ordinary tramp steamer was Ss. a month on the dead weight.
In spite of the first paralysis of freights in August the market was
already beginning to recover in October, when the rate rose to
&8. Id. By December it had reached 6^. During the first six
months of 1915 it rose more rapidly, averaging 18*. throughout the
period and reaching 15*. by the end of it.
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46 BRITISH SHIPPING CONTROL
It is probable that dtiring this period the least of the causes of
high freights was the actual destruction of ships by enemy action.
Both British tonnage and world tonnage were, indeed, almost
identic€d at midsummer 1914 and midsummer 1915. Lloyds'
figures covering ships of all classes and not only ocean-going ton-
nage, give ^-5 and 20-8 million tons gross for British shipping and
45-4 and 45-7 millions for world shipping. The losses of British
ships of all classes had been nearly 400 ships of approximately
650,000 tons gross against which the building amounted to about
1,000,000 tons. For British ocean-going ships the total loss was
160 ships against a building of 150 ships. More important was the
inunediate unemployment of a considerable proportion of the
world's tonnage. About 5,000,000 tons of German and Austrian
ocean shipping were immediately penned in their h€u*bours while
about a hundred similcu* British vessels of some 300,000 tons were
also locked up in Russian and enemy ports. As far as the British
register itself was concerned, this loss was more than offset by the
capture of 151 ocean-going vessels with a total gross tonnage of
over 500,000. From the point of view of the world's transport,
the unemployment of enemy tonnage was, of course, largely offset
by the exclusion of Germany and Austria from the importing
markets of the world. These two countries, however, never
imported enough to occupy fully the total tonnage that was now
put out of action. There was, therefore, some net reduction in the
transporting capacity of the world in relation to its still remaining
requirements, even without consideration of the new requirements
due to the war.
More important than the actual net loss of tonnage through
either losses or forcible unemployment of ships was the delay
inevitably entailed by naval precautions. This is extremely
difficult to estimate and for this period no statistics are available.
It is probable, however, that not less than 20 per cent, of the
importing capacity of vessels arriving and departing from French
and British ports was lost through the delays incidental to their
protection. These delays, of course, only affected vessels in
dangerous waters, and the percentage of loss entailed for the trans-
port of the world as a whole would be a considerably lower figure.
To these delays due to naval measures were added abnormal
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BEGINNING OF SfflPPING CONTROL 47
delays in port, in loading, bunkering, and discharging, resulting
from the disturbance of the normal flow of trade and other causes.
Still more important was the steadily increasing pressure of Govern-
ment demands upon the world's tonnage, and particularly upon the
tonnage under tiie British and Allied flags. The actual amount
of tonnage directly requisitioned by the British Government,
indeed, remained fairly constant throughout this period. This
was, however, only a proportion of the real demands of the war
upon shipping. The manufacture of munitions and of other
supplies for the armies resulted in an increased importation of the
relevant raw materials, which was mainly effected by merchants
chartering in the open market and not, at this period, by requisi-
tion. What was true for British manufacturers was equally true,
though on a somewhat smaller scale, in the case of France and,
rather later, of Italy.
It is interesting to notice that the submarine during this
period occupied a much less important place among Germany's
instruments of attack than it subsequently attained. In the
first five months only 3 ships were sunk by submarines as against
42 by mines and 55 by cruisers and raiders. At this time, indeed,
the submarine was a much more fragile and timid foe than it after-
wards became. It had to keep near its base ports. It could only
live near a shallow bottom on which it could rest at frequent
intervals. It was very vulnerable to any opponent who could find it.
From the beginning of 1915, however, the submarines became far
more active and in the first complete year the losses were 205 by
submarines, 78 by mines, and 77 by cruisers and raiders.
In genertd, therefore, in the first year of the war, we may
say that such inadequacy of tonnage as there was proved scarcely
more than an inconvenience, that its main effect was not to cause
the loss of any useful imports but merely to drive up prices, and
that it resulted not so much from wax losses as from the new
war demands. The submarine was an irritating, but not at present
a grave, aggravation of difficulties due to other causes. It was
serious, not for any present results, but only as a portent of greater
danger in the future.
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CHAPTER n
THE SECOND YEAR-CONTROL BY COMMITTEE
Losses and Freight Rates in the Second Year. The Ship Licensing Caak*
mittee. The Requisitioning (Carriage of Foodstuffs) Committee. The Port and
Transit Executive Committee.
The second year of the war saw a steady developm^it, both of
the various difficulties which we have seen beginning in the first
year, and of the measures taken to meet them.
Losses increased, rising to an average of 87,000 g.t. per month
as compared with 55,000 g.t. per month in the first year. Hie
large building orders of 1913 had been completed, and as the yards
were drained of labour by recruiting, shipbuilding declined. The
output from August 1914 to July 1915 in British yards was
1,000,000 g.t. and in August 1915 to July 1916, 620,000 g.t. At
the same time naval and military demands upon the diminishing
Allied tonnage were seriously, though not rapidly, increasing.
In the latter half of 1915 the proportion of British tramp tonnage
under direct Government requisition rose to 25 per cent, as com-
pared with 20 per cent, in the previous period, and in the first
half of 1916 it rose to about 30 per cent. The demands upon the
freight market made by raw materials required for the war manu-
facturers, but imported under commercial conditions, are less
easily measured but were probably increasing even more seriously.
By ike autiunn of 1915 the effect on freight rates was becoming
very grave. The time-charter rate averaged over 18*. in the latter
half of 1915 and it reached 27*. by the end of it. During these six
months the freight rate for the Indian round voyage rose from
about 100*. to 160*. ; for the Plate round voyage, from 80*. to over
130*. This increase in freights was naturally reflected in a rapid
increase in the value of ships which, as compared with the 1918
price of about £6 per ton dead weight rose from £15 per ton in
July 1915 to about £19. 15*. by December.
Shipping freights thus became one of the factors (though still of
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CONTROL BY COMMITTEE 49
less importance than was commonly supposed) in driving up prices
and particularly the cost of the necessities of life to a menacing
height. The Government was forced into further measures of
control of both supplies and shipping. It became evident that it
was no longer possible to confine Government action to buying
only miUtary suppUes or taking under requisition only the ships
required for direct naval and military service, while leaving all the
other civilian or mimition requirements of the coimtry to the
haggle of the market. The results were becoming too serious
both in social unrest and, indeed, in the actual demands upon the
Exchequer, for the increased cost of raw materials drove up
the prices which the Government paid for their munitions, and the
increased cost of living drove up the rates of wages.
In November 1915, therefore, the Board of Trade, with whom
the general responsibility rested for watching the economic condi-
tion of the country, appointed two conunittees with drastic powers
under Orders in Council.
The Ship Licensing Committee
One of these, the Ship Licensing Committee, began by
exercising a licence control over the overseas employment of
British tonnage exclusively engaged on traffic between ports
outside the British Empire. At the time when it was appointed,
allegations were being frequently made that many British ships
were being employed in work either useless or serving no
British or Allied interest. It was urged that the prohibition
of such employment would make freight available for the more
essential civilian services. The Committee, which consisted of
a number of well-known shipowners under the chairmanship
of an eminent lawyer, was appointed largely to meet these
charges. It spent its fiurst few months in investigating the facts.
These proved to be, that there was comparatively Uttle tonnage
engaged in work which was obviouSly useless or unimportant.
But except in such cases it was difficult for the committee to act
effectively on its own authority. Its work therefore in bringing
ships into useful employment by prohibiting what was useless did
not give any substantial reUef to the general situation. The
tonnage withdrawn from distant work bore a very small proportion
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50 BRITISH SHIPPING CONTROL
to the increasing necessities of the country. The fact is that events
moved too quickly for the Committee. The extension of direct
requisitioning encroached on its work and the effective action,
determining policy, passed from the licensing to the requisitioning
authority. The Committee, however, soon assumed a role for
which it was much better fitted. It was not qualified by its
authority or its constitution to measure or judge between the
country's needs. But with powers extended to licensing voyages
of all British ships, it was admirably qualified in both respects
to apply a policy determined elsewhere to individual ships. The
Committee became the executive instrument of the Government
for putting policy into effect as regards all British tonnage not
controlled by requisition. When the Board of Trade, for example,
arranged fixed ' limitation ' freight rates for the French coal
trade, the Committee secured their observance by refusing to
license charters with higher rates and also by refusing licences to
any ships which tried to escape the French coal trade for more
lucrative employment elsewhere. When the Ministry of Munitions
found it difficult to maintain their ore imports because vessels
found it profitable to take coal outwards and hasten back in ballast
for another cargo, the Committee retrieved the situation by
refusing Ucences for ballast voyages. When the Cabinet, on the
advice of the Shipping Control Committee, restricted the tonnage
in the service of the AlUes to the amoimt in service on April 1, 1916,
the Committee enforced this decision as regards chartered ships by
refusing additional charters, while the Transport Department, in
close liaison, enforced it as regards requisitioned tonnage. With
the practically universal extension of requisition in 1917 the Com-
mittee's activities were suspended. They were revived after the
Armistice during the converse process of transition from requisi-
tion to freedom through intermediate stages of qualified control.
The Committee was therefore an executive instrument, not
a policy-making body. Its contribution to the central problem of
deciding what suppUes should be carried and what sacrificed was
of no great importance.
In one respect, however, the work of the Committee was an
important step in the development of AUied relations. Its
enforcement of the limitation on the amount of tonnage chartered
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CONTROL BY COMMITTEE 51
by the Allies involved constant and detailed negotiations with
Allied representatives in London as to particular charters. Personal
relations were established, knowledge was acquired, and the
habits and methods of co-operation were established. And at the
same time the need for organization upon a stronger basis, both of
knowledge and of authority, was ascertained and recognized.
Requisitioning (Cakriage of Foodstuffs) Committee
The second Committee, estabUshed by a simultaneous Order in \
Council on November 10, 1915 — ^the Requisitioning (Carriage of
Foodstuffs) Committee — ^had a shorter life but was an equally
interesting experiment.
The Order in Council gave power to requisition or direct the
employment of any British ship in such a way as to assist the
importation of food or other necessaries. In practice, however, it
confined its action to the importation of grain (mainly wheat) and
to a novel and very limited form of requisition. It did not, hke the
Transport Department, take a ship, pay so much for it on a time
basis, and run it under its own orders. It merely required the owner
to charter in a particular market, e.g. to bring a cargo of wheat
from the North Atlantic to England.
The Committee's instructions were to provide freight so as to
increase British wheat imports to 800,000 quarters a week from all
sources and to reduce freights, and to do this by forcing tonnage
into the Atlantic wheat trade. Later the importation figure was
reduced, the range of operations was extended to the Plate and
India, and vessels were directed to France and Italy as well as to
Great Britain.
Tramps were ordered to charter for the freight of a cargo of
wheat, or of a cargo containing a specified percentage of wheat,
usually 75 per cent., and North Atlantic liners were required
to take wheat and flour up to half their dead weight capacity.
The Committee had, of course, to draw on the same pool of
ships as the Transport Department which dealt with the general
requirements of the Government. Duplicate requisitioning was,
however, avoided by leaving the selection of the vessels, of a total
tonnage specified by the Committee, to the officer in charge of the
Requisitioning Branch of the department.
E2
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52 BRITISH SHIPPING CONTROL
From November till the middle of February the Committee
directed mider this system a smaller amomit of tonnage than
the unfettered market, with its ordinary economic demand, was
itself attracting. Under this policy and during this period the
Committee's action was entirely ineffective and had no results
upon either imports or upon freight rates. When the Committee
directed, say thirty vessels in a period when the ordinary market
was attracting fifty, the result was naturally not to add thirty to the
normal number of the trade, but to leave that number at fifty and
merely to determine what particular ships should constitute thirty
of that number — a matter of no importance whatever. The
imports for seven weeks averaged only 510,000 quarters, and,
in exact conformity with the general market rate, the Atlantic
wheat freight rate gradually went up from ISs. on November 15 to
14«. 6d. on January 5, 16s. 6d. on February 15, and 18*. 3d. on
February 29.
The Committee then for the first time proceeded to direct
vessels in excess of the number the market was itself capable of
attracting. The effect was immediate and dramatic. The North
Atlantic freight rate, which had been 18*. Sd. on February 29,
dropped to 12«. 6d. on April 20 and to about Ss. by Jime 30.
Weekly imports rose to 665,000 quarters.
By this time, however, it was clear that wheat was obtaining
too much tonnage in relation to other commodities ; the Com-
mittee's activities were restricted and were henceforth of little
importance.
As an experiment in dealing with the problem created by
shortage of tonnage, the Committee was not a success. At first
sight, indeed, it secured all its objects. Wheat imports increased;
the freights on them were reduced. Two serious defects in the
method must, however, be noted. The first is that it is impossible
imder it to secure the whole or even any large proportion of the
benefit of the reduced rate of freight for the consumer. When
rates are broken, as they were in the first period of the Committee's
greatest activity, the inevitable effect is that the greater part of the
difference goes in extra profits for the merchants, who have made
their bargains on the basis of the higher rates previously in force
and who have no inducement to alter their bargains because the
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CONTROL BY COMMITTEE 53
rates have since fallen. To be effective, control over a given com-
modity must be complete. The second defect is even more serious.
The advantage gained for a particular conmiodity is gained at the
expense of all others. The effect of forcing more ships into the wheat
trade than the market would have attracted was to reduce the
imports and increase the freights of other conmiodities, many of
which were no less essential than wheat. Probably the total in-
crease in freights in other markets was greater than the reduction
in the wheat market. The consumer probably gained a small
share in the reduced cost of one commodity at the expense of bear-
ing a large share of a greater total increase in other conmiodities.
To be effective, control over commodities once begun must be
comprehensive in its range as well as complete in its character.
Port and Transit Executive Committee
A third committee, destined to a longer period of usefulness,
the Port and Transit Executive Committee, was formed just
before the end of 1915.
At an early stage in the war the time spent in port in loading,
unloading, and bunkering, became a serious factor in the shipping
position. Many causes contributed to delay vessels for much
longer periods than had been customary in peace. Traffic was
diverted from its ordinary channels, and some ports were therefore
more fully worked than others. Detentions of vessels through
submarine precautions would result in the arrival of a bimch
together instead of the comparatively regular stream for which
the ports were suited. Increases and changes in demands upon
railway transport made it difficult to keep quays and transit sheds
clear. Finally, the labour available for loading and unloading
necessarily suffered with every other service from the constantly
increasing necessities of recruitment and enlistment. The
importance of the delays resulting from these and other causes
has never been adequately recognized. At certain periods in the
war (and for the whole period since the war) the reduction in im-
ports through port delays was greater than that due to the actual
loss of vessels. In France the problem was intrinsically more
difficult and the situation worse than in England. The country
imported only some 20 million tons in peace, but during the war
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64 BRITISH SHIPPING CONTROL
had ultimately to deal with 60 million tons a year. For this
enonnously increased quantity the port fadUties and the whole
mechanism of dispatch and clearance had to be improvised and
built up. Even in England, however, where the totfiJ imports fell
steadily from 55 miUion tons before the war to 35 miUi(m tons in
1917, the importing power of even the reduced tonnage was still
further diminished by the constant or occasional incapacity of
the ports to handle cargoes or the railways to clear th^n.
It was in order to deal with this problem that the Port and
Transit Committee, comprising both official, shipping, and port
experience, was constituted by the Admiralty in December 1915.
It worked continuously till the end of the war at the problem of
improving the conditions in British ports, both by defending port
labour against excessive enlistment, by arranging for the pooling
of berths, by improving the port railway service, and in other ways.
One particularly interesting and successful experiment was the
formation of a labour corps recruited under semi-military and
semi-civilian conditions and so organized as to be available for
rapid transfer to any port where congestion was for the moment
particularly serious. It cannot be said that port conditions were
satisfactory at any time diuing the war, and after the Armistice
they became still worse, largely through shorter working hours and
slacker work. But certainly the conditions were substantially better
than they would have been but for the labour of this committee.
The work of the first two committees described in this
chapter became relatively less and less important as the growing
pressure forced the Government to take more direct and drastic
action.
Power passed more and more into the hands of the requisi-
tioning authority.
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CHAPTER III
THE SECOND YEAR (CONTD.). CONTROL BY
REQUISITION
The Requisitioning System. The Shipping Intelligence Section and the Card
Index. Proportionate Requisitioning. Commercial Branch. Allocation of Ships
to Service. The system of ^ Conditional Release '. Requisition and Commerce.
Bunker Supplies. The Shipping Control Committee. The Shipping Position in
April 1916. Recommendations of the Shipping Control Committee. Difference
in character of Peace and War Cargoes. The Shipping Position in the Second
Year.
The growing demands upon shipping during the second year
greatly increased the scope and importance of requisitioning.
In the first months of the war each of the two main branches
of the Transport Department, the naval and the military, selected
the vessels most suitable for their requirements and issued
their own orders. Simultaneously the local chartering agents at
Cardiff and Newcastle, imder general directions from Naval
Branch, were selecting colliers and exercising a power of local
requisition.
The comparative abundance of shipping made it possible to
continue the independent exercise of these powers throughout
the first year of the war. Constant communication between the
two branches and the local agents, together with their common
responsibility to the Director of Transports, prevented any
serious dupUcation of orders. As the needs of Government trans-
port increased, however, it became evident that the selection
of vessels and their requisitioning must be centraHzed. In the
autumn of 1915 therefore a new branch, the Requisitioning
Branch, was formed. Henceforth this branch selected the ships
and issued the requisitions for all Government requirements.
Gradually all demands for tonnage were considered in conjunction
with all the tonnage available and the arrangements were made
on the basis of one general and comprehensive progranune.
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56 BRITISH SHIPPING CONTROL
In this new work the branch was assisted by the institution
of an elaborate card index, in which ultimately the movements
and emplo}nDient of all the ocean-going tonnage of the world were
followed from day to day. Information was collected from
a score of sources — ^from private tel^rams passing between owners
and merchants (1,000 a day), from special messages from Customs
officers at home and from Naval Transport Officers and the Ad-
miralty Officers at home and abroad (400 a day), from ship-
owners, from liner conferences, from naval boarding and patroll-
ing vessels, and from many others. When it became necessary,
as a measure of precaution in the anti-submarine arrangements,
to prohibit private telegrams as to ship movements, all these
sources of information became inadequate. At very short notice
arrangements were made with Consuls and other Government
officials in practically every part of the world to send special
cipher cables direct to the index.
The information so obtained was recorded in a system which
made it rapidly available for any pmrpose. Each ship had its own
card on which every item of information about it was concen-
trated. The coloiu- of the card distinguished its type and a mov-
able metal clip its approximate position. The index was primarily
formed for the internal work of the Transport Department. In
time, however, it had a much more extended use. By the end of
the war it was furnishing some 5,000 different returns a year
required for executive purposes by the many departments of the
Government concerned in knowing the movements of supplies
or ships. It served not only the different executive branches of
the Transport Department, but also the big supply departments ;
the authorities responsible for the blockade; for making the
arrangements with neutrals ; for arranging defensive armament ;
for dazzle painting and convoys. In 1918 the index was incor-
porated into the Allied organization. The French shipping
authorities used its information for their current executive work
by means of telephone communication from London to Paris.
Tlie American shipping authorities similarly relied for much of
their information on daily cables from the index.
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CONTROI- BY REQUISITION 57
Selection of Vessels
With the aid of the Shipping Intelligence Section, and its
card index, the Requisitioning Branch would draw vessels from
the entire range of the British Mercantile Marine, would issue
requisition notices to the owners, and then place them under the
orders of the various executive branches requiring them.
In the process of selection many factors required to be taken
into account. The vessel must be of the right type, and be avail-
able for service at the place and date required. Subject, however,
to these two primary conditions, the branch had to consider how
it could obtain tonnage with least injury to the trade of the
country, and how it could most fairly distribute the burden of
requisition between the different shipowners.
One important reform was at once introduced. It was im-
possible to obtain from the War Office and other supply depart-
ments sufficiently early notice to arrange shipping on a definite
programme. Very frequently demands would be received so late
that there was practically no field for selection. Vessels which
could make the dates had to be requisitioned, whether or not
they were entirely suitable and whatever dislocation of industry
was involved. In many cases they had to be requisitioned on
arrival at loading ports after they had completed an outward
voyage, and in some cases part cargoes had actually to be re-
moved. At the beginning of January 1916, for example, the
wheat trade was seriously dislocated because vessels which were
already in or near the Plate to load wheat, had to load nitrates
in Chili for the Ministry of Munitions. The result was to cause
a very heavy loss to the importing merchants and so to make them
restrict and reduce further imports of wheat. As the wheat
supplies of the coimtry were at this time dependent upon the
private enterprise of these merchants, this was obviously a most
serious matter. At the same time no solution could be found
by asking departments like the Admiralty, the War Office, and
the Ministry of Munitions, to give several months' notice of all their
requirements. Under the changing conditions of the war it was
impossible to expect that they could always be known so far ahead.
The central direction of shipping made another solution possible.
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58 BRITISH SHIPPING CONTROL
Without waiting for specific demands Requisitioning Branch b^an
to issue notices to a number of vessels that they must expect to
come on service at the expiration of their current voyages. By
this means there were vessels in hand to meet emergencies when
they occurred. By pursuing this poHcy cautiously it was possible
to avoid almost all last-moment requisitions, and at the same
time the vessels notified were never in excess of the demands when
they matured and were never wasted. It is a much easier matter
to gauge with sufficient precision the approximate total likely
to be required for all work than to estimate in detail for each
particular service. Henceforward new requirements as they were
notified were met either by a re-allocation of a vessel already on
service or by one which had, under the above system, received
long notice that she would be required for service on completion
of a specified private voyage. The result was entirely good. In
and after 1916 it was practically never necessary to requisition a
vessel after arrival at her loading port. In comparatively few cases
was it even necessary to break charters. The system was made
more perfect by a close liaison with the Ship Licensing Committee
and by specially elaborate precautions to avoid the necessity of
breaking wheat charters. Tlie total effect of this centralization
of authority, coupled with the arrangements described above with
the Ship Licensing Committee and the Requisitioning (Carriage
of Foodstuffs) Committee, was to reduce to a minimum and almost
to aboUsh the dislocation of commercial arrangements caused by
uncertainty as to whether a given charter could ever be carried
-out. Comimercial requirements had, of course, to be curtailed
as before on account of requisitioning but not, except in rare cases,
without adequate notice. Merchants had difficulty in finding
tonnage, had to pay high rates for it, but were reasonably sure
that, once chartered, it would not be tfitken away from them.
The other task, of allotting requisitioning fairly between
different owners, though of less intrinsic importance, occupied
a serious, and perhaps disproportionate, part of the time and
thought of the harassed Transport Department.
It will be remembered that the rates paid for requisitioned
ships (* Blue Book ' rates) were moderate and fixed, while those
in the open market were exorbitant and continually rising.
This discrepancy added a difficult and invidious task to the
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CONTROL BY REQUISITION 59
duty of requisitioning. For a British owner to have his ships
requisitioned was always in his eyes a disaster, and to have more
than his share, a grievance.
The anomaUes of a system which allowed the transport of
private cargoes to be so much more profitable than that of Govern-
ment cargoes are well illustrated by the unfortunate case of one
shipowner who had for years before the war made special efforts
to build exactly the type of vessel most suitable for coaling the
Fleet. He had built his vessels much more expensively. He had
given them extra speed, and designed them for rapid discharge.
The inevitable consequence was that the Fleet wanted, and had
to have, the whole of his fleet continuously at its service. The
owner therefore got no more than Blue Book rates (with a very
smcdl addition to represent special value) for all his expensive
fleet, and had the mortification of seeing owners of old and inferior
ships, earning several times as much money precisely because
they had not been designed to be useful in a national emergency.
This was, however, an exceptional case. There was usually in
1916 a considerable, though diminishing, range of selection.
Wlierever possible the department, when obliged to requisition
further vessels, took them from owners who had the largest propor-
tion of their tonnage still imder their own control. For this purpose
elaborate statistical records were kept which showed at a glance
what service had been obtained from each owner's fleet up to date
(as a percentage of the total possibiUty of service if his whole
fleet had been continuously requisitioned). In time it was found
possible to allot requisitioning so as to keep most of these per-
centages approximately equal.
This minor, but embarrassing, administrative difficulty was
removed incidentally When the larger problem of excessive profits
was solved in 1917 by the extension of requisitioning till it in-
cluded all ships, combined with an extension of control till it
included practically all suppUes.
Commercial Branch
Early in 1916 another new branch was estabUshed in the
Transport Department which was destined to be of great im-
portance, particularly in connexion with the problem which forms
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60 BRITISH SfflPPING CONTROL
the theme of this book. In the first year and a half of the war.
Government transport had been ahnost confined to transport
directly required for purposes of the war. Sugar was the only
notable exception, and the transport of sugar, which was compara-
tively simple, had been conveniently, though on no very logical
principle, added to the duties of the Naval Branch. Now, however,
the extension of control and the reaction in every direction of
Government requisition upon the chartering of ships for com-
mercial cargoes threw a great deal of commercial work upon the
department. A new branch, the Conmiercial Branch, was there-
fore formed, at the head of which, after a short period, a well-known
shipowner was appointed. This branch gradually accepted re-
sponsibiUty for the transport of each new commodity which was
brought within the sphere of Government control till it finally
handled the transport of nearly all the civilian suppUes of the
country.
In time this branch shared with Requisitioning Branch
such responsibiUty as fell upon the shipping authority for giving
a preference to some conmiodities over others by the allocation
of ships and shipping space. The tonnage required for the trans-
port of troops, of finished munitions, and of suppUes for the Navy
(that is, the demands handled by Naval and Military branches),
was relatively incapable of reduction or variation. Adjustments
to the changing shipping position had for the most part to be
made by variations in the imports of food and of the raw materials
for both civilian and mihtary manufacture, all of which were
handled by Commercial Branch. And while Requisitioning
Branch was indented upon by all these three branches, and had
some authority over the tonnage allotted to each of them, the
allocation of tonnage as between the various comimodities handled
by Commercial Branch was mainly determined by the latter
branch. Later, when liners too were requisitioned and were
loaded in accordance with official instructions and in adjuistment
with the general Government programme. Commercial Branch
issued the orders. It followed naturally that when responsibility
was accepted for specific Allied programmes, such as wheat, the
same branch had to give practical effect to it.
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CONTROL BY REQUISITION 61
Allocation of Ships to Service
At this point it may be well to give a description of the actual
mechanism by which vessels were being from day to day allotted
to their respective tasks.
The big war departments, the Admiralty and the War Office,
were sending in their demands in detail. Some of these were in
the form of requests for actual ships, e. g. so many auxiUary
cruisers of a specified type and speed. The Transport Depart-
ment's duty was then practically limited to finding a ship and
paying the owner — ^the Admiralty taking it, manning it, and
running it like a ship of the Navy; This form of management
was, however, comparatively rare. More commonly the demand
would be for the conveyance of such and such an amount of stores
at certain dates and to certain places. A whole scheme of collier
supply, for example, would be sent in for the Fleet and its depots
all over the world. The War Office would demand the transport
of specified numbers of troops both from the Dominions to England
and on the small Channel steamers from England to France. These
demands, for the most part in terms not of ships but of transport,
would be handled by the relevant executive branches, and turned
into detailed programmes of so many ships of certain types. At
any given moment each of these branches therefore had under
its direct orders a big fleet amounting perhaps to about a thousand
ships.
Some of these vessels were kept almost continuously under
Government control. Transports, for example, which required
special fittings to make them suitable for the conveyance of troops,
were maintained as an unchanged transport fleet, supplemented
when necessary, but with practically no interchange with free
vessels. They were permanently outside the ordinary free traffic
of the world.
A similar system, applied without modification to all cargo
vessels, would, however, have meant great loss and waste. Colliers,
for instance, were required to take coal to the Mediterranean, but
when they had discharged their cargo at Malta or Alexandria,
there was no Government cargo requiring return transport.
Private return cai^oes were, however, at the same time waiting
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62 BRITISH SHIPPING CONTROL
for fraght, cotton seed from Alexandria ; or ore, wheat, or linseed
from India, just through the CanaL If therefore Government
cargoes had been carried solely by ships on continuous Government
service and private cargoes by ships continuously in private em-
ployment, requisitioned ships would have gone to the Mediter-
ranean with Government cargoes and returned empty, while
private ships were going to the Mediterranean empty, to return
with private cargoes — ^an obvious waste. It was therefore neces-
sary to make the Government ship available for private cargo as
soon as she had discharged her coaL At the same time, however,
it was vital to ^isure that there should always be suitable vessels
available in Wales for the very lai^ weekly coal programme for
the Navy, The problem could not be solved at this moment, as
it was later, by the Government shipping a return cargo on their
own account, as they neither controlled the return cargoes nor were
^npowered to let tonnage on the market to private merchants.
For the time a solution was therefore found in the practice of
giving the vessel ' temporary release ' from Government requisi-
tion as soon as she had discharged her Government cargo. The
owner was allowed to charter his ship on the market for the return
voyage on the condition (which was necessary in order to secure
that colliers were always available in South Wales) that he did
not charter her for too long a voyage. This example from the
collier service is only one illustration of a system extending over
a very wide range and variety of ships and services.
We see in this device of conditional ' release ' the way in which
an unsought and invidious responsibihty was gradueJly thrust
upon the Transport Department for judging between commercial
requirements.
It is important to rem^nber that control was extended step
by step by the compelling force of circumstances. It was already
almost complete before it was adopted as a deliberate policy.
Elach new extension was normally undertaken reluctantly as the
only method of meeting an immediate emergency.
In releasing a coUier at Malta the department had to decide
whether to allow her to go to India, or only as far as Alexandria,
before retiuning to coUier service. This meant deciding in fact
whether an Indian cargo or an Alexandrian cargo should be im-
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CONTROL BY REQUISITION 63
ported and thus forming a judgment as to whether at the moment
manganese or cotton seed was more essential.
As requisition for Government transport increased and the
number of free ships diminished, such decisions became a greater
factor in the freight market. Thus, little by little, the department
was thrust into the position of measuring the relative importance
of the commercial needs of the country. For this work it had
no adequate information or organization. It had at its service
no statistical survey of the requirements of the country in conjunc-
tion with the current figures of imports, on which the T^ork might
have been done on a scientific basis. It did the best it could with
the assistance of its Advisory Committee of shipowners and with
such light as was thi'own on its problem by the rates of the freight
market, by direct representations from coimtries or interests con-
cerned, and by other forms of information. This was a responsi-
bility, however, which the department was very anxious to escape
and which it hoped would have been taken over by the new body
described on p. 64 — ^the Shipping Control Committee — whose
establishment it had strongly urged.
Meanwhile the pooling of tonnage under the above system
was continually increasing. A very large proportion of tonnage
in Government service was interchangeable between different
work. The ordinary type of ocean-going tramp might be, and
was most economically, used interchangeably to carry coal, sugar,
steel, and oats, or commercial cargoes of many kinds. The system
reached its fullest development in connexion with 60-100 coUiers
discharging in the Mediterranean each month, and the general
shipping arrangements were largely built up on the re-allocations
of these vessels.
Another good instance of the way in which the responsibihties
of the department increased as free tonnage diminished is the
action taken to maintain the supplies of bunker depots. Partly
through the restriction both of tonnage and of the exports of coal,
of which the production had become inadequate, private enter-
prise failed to secure coal suppUes for the private coal depots.
If nothing had been done the whole tonnage of the world might
have been immobilized for want of bunker coal. A scheme was
therefore hurriedly devised by which use was made of the Trans-
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64 BRITISH SHIPPING CONTROL
port Department's power of control to force the necessary vessek
into bunker supply work. A detailed scheme was worked out and
vessels were released from direct Government service at specified
times on condition that they chartered on the market to carry
coal in accordance with it. The arrangements affected the Admir-
alty Coal Exports Committee, the Ship Licensing Committee, the
Requisitioning (Carriage of Foodstuffs) Committee, and had to
be agreed with all these authorities, but in practice they had to
be put into force in connexion with the release of Admiralty
vessels and therefore by the Transport Department.
It was becoming clear from this and many other instances that
some authority was required to co-ordinate the shipping problems.
Shipping Control Committee
On January 27, 1916, therefore, the Shipping Control Com-
mittee, consisting of a Cabinet Minister, two well-known ship-
owners, and one eminent financier, was appointed with the object
of exercising a general supervision over shipping problems. The
terms of reference included the duties of deciding on allocations
of British ships to the AUies and to the essential imports of the
United Kingdom, and the right of making representations to
the Cabinet, but not of deciding, on allocations for naval and
miUtary purposes. These duties, if understood in their fullest
sense, would have implied a general supervision of all the problems
connected with the shortage of mercantile tonnage and the respon-
sibiUty either for handling them or for seeing that they were
effectively handled by some Government department or other
body. It is probable, however, that the real intentions of the
Grovernment in appointing the Committee were more restricted.
In any case the Committee consisted of part-time members,
who all had other work and interests ; and had only one whole-
time officer in its service. Its actual work, therefore, was very
limited and brought no substantial reUef to the burden resting
upon the Transport Department. The Committee was dependent
for its information and the presentation of the problems with
which it dealt upon the executive departments. It sometimes acted
as a useful intermediary and arbitrator when the claims of these
different departments or of different AUied Governments were in
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CONTROL BY REQUISITION 66
conflict. Its constitution did not, however, enable it to undertake
original and independent work involving continuous and detailed
investigation. While it assumed, for instance, a formal responsi-
bility for deciding between the different commercial requirements,
in practice it merely endorsed and gave support to the work of
the Transpcwrt Department and neither supplemented nor re-
placed it.
The Shipping Position in Apeil 1916
The most important action taken by the Committee may be
briefly summarized.
A few weeks after its appointment it made a general survey
of the British shipping position. This showed that, allowing for
the vessels engaged in Government service, between 1,500 and
1,600 steamers of some 7,000,000 tons gross were left to meet the
demands of the import trade of the United Kingdom and the
extra demands of the AUies. The ocean overseas imports into
the United Kingdom dining the first twelve months of the war
were estimated at 49,500,000 tons weight. This required
31,160,561 tons net of shipping entrances, that is, in view of the
average time taken on a voyage, about 7,790,000 tons net, or
12,600,000 tons gross of shipping. Of this, foreign shipping still
furnished about 3,600,000 tons gross, leaving as demands of
British imports on British shipping 8,900,000 tons gross. New
demands, based upon very real necessities and strongly urged,
were being made by France for about 608,000 tons gross and by
Italy, for about 820,000 tons gross.
The result was a total demand, if the ordinary import trade
were to be maintained on the scale of the first year, of some
10,328,000 tons gross, with only 7,068,000 tons gross to meet it,
showing a deficit of 3,250,000 tons, or a deficiency of 13,000,000
tons weight of imports.
The Committee therefore suggested the temporary prohibition
of all imports, except specified essentials, amounting to a total
reduction at the rate of 13,000,000 tons per year.
A reduction of this kind and on this scale, effected by direct
and absolute prohibition, would have had incalculable results
upon the still unexamined and imorganized economic system of the
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66 BRITISH SHIPPING CONTROL
country, and the information and preparatory work behind the
recommendation were clearly not sufficient to warrant such
drastic action. In particular, later experience showed that while
a certain limited number of articles could be excluded altogether
as unnecessary, the economy that could be effected in this way
was relatively smalL The great bulk of any reduction must be
made not by the total exclusion of certain articles but by the
exclusion of all beyond certain points. The actual effect of the
above recommendation was therefore comparatively sUght. A
scheme of import prohibitions which, even if fully enforced, would
have given a reduction not of 13,000,000tons but of about4,000,000
tons was approved, and in actual appUcation this amounted to
less than 2,000,000 tons. The Committee were right, however, in
stating that the shortage of tonnage inevitably entailed a much
greater reduction (though they overstated it). The consequence
was that only a small part of the reduction was effected by
a deUberate exclusion of unessentials. The bulk continued to be
effected in the future as in the past, partly through the exclusion
by high freights of articles which could not pay the price, and
partly by the executive action of the Transport Department in
the allocation of tonnage.
Meantime, however, the actual figiu^es of imports were showing
a compensating factor for which sufficient allowance had not been
made.
In the eight months ended Jime SO, 1916, the tonnage of ships
entered was 36 per cent, below the figures for the corresponding
eight months ended Jime 30, 1914, but the reduction in the weight
of imports was only 10 per cent. As compared with the eight
months ended June 30, 1916, the reduction in tonnage was 10 per
cent, and in net weight of imports less than 3 per cent. These
figures point to a curious and interesting fact about the natiu*e
of requirements in war as compared with those of peace. War
imports tend to be much heavier in relation to bidk. Heavy
cargoes like coal and ore, munitions, nitrates and wheat are carried,
and bulky cargoes, wooden manufactures, &c., are dispensed with.
Imports measured in weight therefore are always greater than can
be expected from peace statistics on the basis of tonnage entrances
of ships. Incidentally this throws some light upon the chaise
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CONTROL BY REQUISITION 67
that was constantly being made against the Transport Department
that ships were leaving their ports with empty space. It was true ;
it was necessarily true. The ships of the world were built to meet
peace requirements. They were so built as on the whole to carry
the cargoes wanted with their space just filled and the weight
such as just to bring the vessel down to her Plimsoll marks. It
is obvious therefore that if, with the ships remaining as they were
in peace, war cargoes became heavier in relation to bulk, the ships
of the world would be brought down to their Plimsoll marks with
much of their space left empty. No conceivable management
therefore could have filled the space in all the ships.
The other recommendations of the Committee were equally
rough and ready. It was proposed to withdraw vessels from naval
and military service ; and to limit British tonnage allotted to the
Allies to the amount in their service on April 1, 1916.
Both these recommendations were based solely upon a con-
sideration of the needs of tonnage for other purposes, i. e. British
conunercial and civilian supplies. The Committee possessed no
real information, which was indeed very difficult to obtain, as to
either naval and military or Allied needs. It was therefore im-
possible to give full and permanent effect to them. The one with
regard to the Allies was in fact enforced with some qualifications
for a time and it had the most important indirect consequences.
It caused such a shortage of certain Allied commodities as to
compel reconsideration, and at the same time it demonstrated
the necessity of basing this new action upon a more complete
organization and fuller knowledge than had hitherto been available.
Generally it may be said that the Shipping Control Committee
was an interesting transitional experiment. Its constitution
recognized the principle that no authority could do work of the
kind required miless it both had access to the ultimate power in
the State and included persons who were in contact with the
executive work of controlling ships. But the members of the
Committee could only devote a part of their time to the work ;
and those of them who were associated with the Transport Depart-
ment were there in an advisory capacity without direct executive
authority. The main limitations of the work of the Committee,
however, resulted from the fact that it did not recognize the
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68 BRITISH SHIPPING CONTROL
necessity of a strong administrative staff acquiring the necessary
information and working in detail upon the intricate problems
involved.
The essential problem was, therefore, still unsolved, but the
lessons of this last experiment were clearly in the minds of those
who ultimately constituted the later organization.
The second year of the war was thus one which witnessed
a great development in the British control system, both of supplies
and of shipping. It began with an inconvenient, though stHl not
dangerous, shortage of tonnage; it ended with a situation of
serious difficulty. Government demands on tonnage continued
to expand; port delays grew; losses increased and were no
longer met by the declii]dng output. The normal economic system,
based upon competitive individual enterprise, was now breaking
down in every direction ; and by the end of the second year
(July 1916) control was extended over the greater part of the
economic system and clearly destined to include the remainder.
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CHAPTER IV
SHIPPING IN THE THIRD YEAR (1916-17)
The Shipping Position. Growth of the Shipping organization. Liner Requisi-
tioning. The Ministry of Shipping. Shipowners and officials. The Imports
Restriction Committee. The Tonnage Priority Committee. The new Submarine
Campaign. Allocation of Shipping in 1917. The Entry of America. The
Shipbuilding effort of 1917. American Shipbuilding. Summary of First Three
Years.
The third year of the wax was one of crucial importance. The
shipping situation became more serious than at any previous
period. As the intensive submarine campaign began and was
countered by the institution of the convoy system, America
ranged herself with the Allies. There was a great development
in British organization, the Ministry of Food being estabUshed
to centralize the control of food, and the Ministry of Shipping that
of shipping; and a renewed effort in shipbuilding was made
between Great Britain and America.
The Shipping Position
The increasing shortage of tonnage was reflected in the later
months of 1916 in the increasing freight rates and profits which
for British ships now reached their maximum limit. British time-
charter rates rose to 40*. a ton d.w. and even touched 50*. as
compared with 3*. immediately before the war and 13*. to 18*. in
1916. Requisition was being extended to cover practically all
British ships, and they were paid at the uniform Blue Book rates.
Thereafter such few private charters as were allowed give no
useful indication of the shipping position.
In February 1917 the new submarine campaign began. As
we shall see in a later chapter, its success was immediate. Within
a few months the submarine blockade became a greater danger
to the AUies than the surface blockade was to Germany. Losses
at the rate of April 1917 would have soon nullified the miUtary
efforts of the AUies. Probably sotaie of the distant expeditions
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70 BRITISH SHIPPING CONTROL
woxild have had to be withdrawn at any cost. The danger was
ultimately met, as we shall see, by the convoy system, but in the
third year this system was a hope of the future rather than a proved
success.
The position in the spring of 1917 was indeed more serious
than at any time of the war before or after. The losses were at
their maximum, the new system of defence, the convoy, had not
yet demonstrated its efficacy, building in the Allied coimtries
was at its minimum; the new American construction had not
been begun or even projected, the complete organization for the
control of suppUes in the Alhed countries and for measiuing their
comparative importance had not been developed. So grave was
the situation that at this moment there were many who thought
that it was hopeless and that the Government ought to take the
shortage of shipping into account in considering their poUcy with
regard to continuing the war.
Geowth of Shipping Oeganization
The increased gravity of the position resulted in a rapid increase
in organization. A later chapter will describe in outline the
centraUzation of the control of food by the new Ministry of Food
estabUshed in December 1916, and the extension of conixol by the
Ministry of Munitions, War Office, and Board of Trade, over other
materials. We must follow in rather more detail the growth in
the organization of shipping.
By the end of 1916 the Transport Department had become
a large and efficient office upon which the force of circumstances
had thrust a measure of responsibiUty altogether in excess of its
status iand recognized authority. The management and still more
the allocation of shipping had become the crucial factor in the
conduct of the war, and it was clearly anomalous that the responsi-
bility for work of this character should rest upon a branch of the
Admiralty whose main attention was necessarily directed to
quite a different sphere. The new Government formed at this
period therefore estabUshed a new Ministry of Shipping imder
a Shipping Controller. This Ministry had the rank and status
of a separate department with representation in the Cabinet, and
its powers were derived from the Act of Parliament by which it
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COMPLETION OF SfflPPING CONTROL 71
was constituted and no longer depended upon the Prerogative.
The Transport Department was absorbed in the new Ministry and
throughout formed the nucleus and central part. No essential
change was made in the internal organization although the
department was expanded to meet its increasing work. New
branches were added to deal with certain new duties, such as
sh^building, that were afterwards assigned to it, and it was
strengthened by the association of expert knowledge and by the
greater weight and authority among shipowners due to the choice
of the new Controller from among their numbers.
Its work was, however, considerably increased by a decision of
the Government to extend requisition over all British vessels.
Hitherto the Government had requisitioned the vessels it needed
for its own services. These had continually increased, as the area
of control was extended, and, by the end of 1916, absorbed nearly
all British tramps. The remainder, however, were free to accept
charters in the open market, and the majority of liners still
plied on their accustomed routes. The Government had indeed
requisitioned a number of liners, particularly for the work of trans-
porting troops, but the main burden of service had hitherto fallen
on tramps, whose withdrawal of course meant no such economic
disturbance as the removal of liners from a regular service.
The free bookings on liners, indeed, represented throughout the
earlier period of the war the main safety valve of the system, the
method through which any interference with the economic life
of the country, which might have been caused by Government
action based upon inadequate knowledge, was corrected and
remedied. The liners in fact had assumed the part taken by
tramps in peace time of being the main adjusting factor in
a changing economic demand.
By the end of 1916, however, with the increase of the range
of Government control it became evident that liners could not
continue to enjoy their immunity. Either liner services must
be depleted by requisition or they must themselves be controlled.
For a time the former method was adopted, though on an in-
adequate scale. Early in 1917 the Government decided upon
universal requisition, partly in order to secure closer control and
partly to restrain profits.
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72 BBinSH SHIPPING CONTROL
The Ministry were loath to undertake suddenly the responsi-
bility for the direct management of this large block of additional
tonnage and it was clearly desirable to utilize the services of the
owners' local organization at ports of loading and discharge.
LiNEB Requisitioning
An ingenious and novel form of requisition was therefore
devised by a well-known liner owner and put into very successful
execution by him. All liners were formally requisitioned and paid
at Blue Book rates. But the owners continued to run them
and to fill any space not occupied by the increasing quantities of
Government suppHes by offering freight on the market in the
ordinary way, the freight, however, being henceforth on Govern-
ment not private account. To adioinister this new form of
requisition a new section of Requisitioning Branch was formed,
under the general control of a committee of liner owners. The €dd
of the liner conferences and their organization was enlisted.
The ships on every line were reviewed in the light of the Govern-
ment requirements on the different routes, and the Atlantic liner
services were supplemented by the diversion of liners from more
distant routes to meet the continual increase in shipments from the
nearest source of supply in North America. The liner space so
available was then filled in accordance with orders issued by the
Commercial Branch. This system became of the utmost import-
ance in the supply arrangements of the country. By the end of
the war indeed more than four-fifths of the imports were brought
in under it, less than one-fifth coming in tramp steamers re-
quisitioned under the early system.
The increase in shipments from North America soon created
a diJBftcult problem of adjusting railway transport to the ports
with loading of the ships ; and an organization, which grew to
large dimensions after America joined the war, was established
in New York to undertake the intricate work involved. The
co-operation between the American ^d British Governments
was signally marked in 1917 by an invitation to the head of the
British organization to accept a position on the American Ship-
ping Committee at New York which allocated American tonnage
imder general instructions from the Shipping Board at Washington.
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COMPLETION OF SfflPPING CONTROL 73
Duties and Pebsonnel of Ministry
In addition to new duties of this character, however, much of
the work undertaken by committees, which had been independent
of the Transport Department, was brought within the authority
6f the new Ministry. It accepted for a time the responsibility for
shipbuilding and exercised a general authority over the Neutral
Tonnage Conference and the Executive of the Chartering Com-
mittee (p. 106). The Shipping Control Committee terminated its
separate existence, some of its members serving as an Advisory
Committee to the new Ministry in replacement of the Advisory
Committee of the Transport Department.
By the middle of 1917 the Ministry had proved itseU one of
the most successful of the new departments created during the
war. Its several branches and its large staff were working together
in the closest co-operation, and it had its duties well in hand.
This success was due partly to the personaUty of the Shipping
Controller, partly, it may be suggested, to the fact that, unlike
most new departments, it had as a nucleus a department of the
permanent service, whose members had already worked together
for years. The Ministry also presented a particularly good example
of tiie association of the permanent official and the business man,
perhaps the most successful in British administration. It was
an equal association and not the subordination of the one class
to the other. The Minister was himseU a shipowner and was
assisted by an advisory committee consisting of shipowners. On
the other hand, most of the important departments were in charge
of permanent officials, with shipowners on their staffs, though one
of the most important and most successful was imder a shipowner
with civil servants on his staff. Probably both shipowners and
officials learned in their daily association to appreciate quaUties
in the other which they had scarcely recognized before. To the
official the shipowner had during the early part of the war often
seemed a person unduly concentrated on the management and
interests of a particular group of ships ; with an inadequate con-
ception of the necessary consequences of a submarine campaign
and the demands on shipping of a great war ; inclined to think
that peace methods, the operation of supply and demand, the
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74 BRITISH SfflPPING CONTROI-
freight and charter system, were still desirable long after they had
in fact become impossible ; reluctant to see trade activities sub-
ordinated to a need which he saw less clearly than he did the cost
of meeting it. To the shipowner the official was doubtless a person
handling diunsily and in the mass a business which required
expert knowledge and a deUcacy of detailed arrangements beyond
the scope of official methods; a person who was sometimes
curiously tortuous and dilatory in his methods and concerned
with so many considerations apparently irrelevant to the business
of managing ships. When they worked together, however, the
official soon found that individual shipowners at least brought
qualities and knowledge outside the compass of most officials.
He found that some of the organizations hitherto used as a defence
against necessary requisitioning could, with shipowners in the
department, be used to make requisition itself and the subsequent
control of shipping more effective and more economical. The
shipowner, on tiie other hand, found that the faculty of adminis-
tration, the acquired experience and aptitude in linking and co-
ordinating the special knowledge of a particular trade or profession
with the necessarily intricate system of Government control was
itself an ' art ' as important and valuable as his own. He realized
that when the automatic guide and criterion of the rising and
falling freight market had disappeared, and necessarily disappeared,
the choice and the direction of ships involved some considerations
which were outside his own special experience. The shipowner,
so long as he kept within a limited number of laws and regulations,
could under peace conditions decide what to do with his ships
by the comparatively simple criterion of the most lucrative rate.
He need take into account neither political considerations, the
needs of his customers nor the susceptibilities of Allies and
Dominions, except only in so far as they were automatically
registered for him in the freight market. But he realized, when
he found himself in an official position, that in war these things
did indeed require consideration and that his own technical
knowledge needed to be supplemented by the sort of skill which
is given by official experience.
Both officials and shipowners made real contributions to the
constructive work of building a new organization and to the
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COMPLETION OF SfflPPING CONTROL 75
devdopment of new policy, as well as to the current business of
administration ; and few of either profession who worked in the
Department would contend that it could have been successfully
run without both.
The departmental organization of the Ministry to control
shipping was in the same year supplemented by two Committees
designed to reduce the demands made upon the Department. The
first of these was purely temporary. In January 1917 the Govern-
ment appointed a new Imports Restriction Committee with
instructions to reduce the import supply programmes of the
different departments by about five hundred thousand tons
a month, with a view to sparing both tonnage and exchange.
While the Committee was still sitting, the new submarine campaign
b^an and the losses made it at once clear that a reduction of im-
ports would be required at the rate of at least a million tons
a month and must be made with reference solely or almost solely
to the shipping problem without regard to finance. This task
proved beyond the capacity of the Committee, and once more
the hope that programmes would be reduced within the limits
of transport proved to be illusory. Once more the choice between
imports which should come in and those which should be left
behind had in fact to be determined mainly by the actual alloca-
tion of ships from day to day.
Tonnage Peioeity Committee
One more attempt was made to bring supply programmes
within the capacity of transport. The Shipping Control Committee
had proved inadequate for this pm^ose, because it did not effec-
tively represent or control the supply departments themselves. An
Inter-Allied Shipping Committee (p. 140) had failed, because its
members had neither the authority of Ministers nor the daily con-
tact of executive officials. The Imports Restriction Committee had
again failed to achieve its task, because the. shipping problem was
changing too quickly for the plans drawn up by any temporary
committee to have more than a very temporary utility. The
new committee, the Tonnage Priority Committee, attempted
to avoid these causes of failure. It was permanent (it met
once a week, and continued to do so with some intervals
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76 BRITISH SHIPPING CONTROL
throughout 1917 and a part of 1918), and it was composed of the
actual executive officios from the different departments who
were handling the several supply programmes. It served a useful
purpose in enabling the different supply departments to under-
stand why it was that the shipping authorities were unable to meet
their requests, and it secured considerable reductions in their
programmes and consequently lightened the burden of responsi-
bility falling directly upon the shipping authority. It proved,
however, inadequate for the full task contemplated because, as
the shortage of tonnage became more serious, the reductions in
the supply programmes entailed serious political and other
dangers. It was impossible for the officials on the Committee to
take the responsibiUty of assenting to them, and the Committee,
while presided over by a Minister representing shipping, did not
include Ministers from the supply departments who were able to
speak with the necessary authority.
The New Submarine Campaign
During the winter the Allies' blockade and the preceding
failure of harvest in Germany, as we now know, almost brought
the enemy to her knees. Germany found the greatest difficulty
in persuading either her army or her civilian population to
continue the struggle and suffered greater privations than at
any other time of the war before or since. It was in this desperate
position that she took her decision to abandon the previous
restrictions on her submarine warfare and to sink without dis-
tinction and without warning. This at once radically changed
the whole of the Allied shipping position. Throughout the two
and a half years of the war the shortage of shipping due originaUy
to the demand on shipping made for war purposes and aggravated
only, not primarily caused, by submarine losses, had been
extremely inconvenient but had not been a source of imminent
and deadly peril. The tonnage of the world was not substantially
less at the end of 1916 than in 1913. The tonnage at the disposal
of the Allies was not very seriously less. Building was, indeed,
far below losses by the end of 1916, but, even so, it is certain that,
with losses as they were before the intensive submarine campaign
began, the Allies could have continued the war indefinitely without
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COMPLETION OF SHIPPING CONTROL 77
danger of any of their main efforts being nullified by shortage of
ships. The situation was immediately and dramatically altered
by the new form of warfare. The whole war effort of the Allies
was soon threatened with disaster ; and all the main European
Allies were in inmiinent danger of starvation. If no successful
answer had been found the whole course of the later mihtary
struggle, and probably the issue of the war itself, must have
been profoundly different. It is fortimate, indeed, that the very
gravity of the situation resulted, as we shall see, in a real chance
being given to the system of convoy, which had already been
tried on a small scale with some success and had been urged for
many months by some of the ablest British naval officers as the
real solution of the submarine problem. This system improved
the position substantially in the fourth year, but in the third
year, with which we are now dealing, it was still a hope of the
future.
Allocation of SmppiNo in 1917
It is perhaps worth while to look for a moment at the system
of the control of supplies at this period from the particular angle
and perhaps with the jaundiced eye of one responsible for requisi-
tioning and allotting British tonnage to transport them. In
France, in Belgium, in Salonica, in the Dardanelles, in Palestine,
British soldiers yrere facing the enemy. Their transportation
from England, from AustraUa, from Canada, from India required
an average use of 70 ships. They required to be maintained, to
be clothed, to be fed, to have new railways for their operations,
timber for their trenches and their huts, medical attention
for their invalids and wounded (336 ships). Behind them in
England, in Canada, and in America, the raw materials of the
industries which made their munitions and their clothes had to
be imported (350 ships). At the same time the British Navy had
to be supplemented by auxiliaries (100 ships) ; to be coaled,
fueled, and supplied (300 ships). Meantime the AUies had corre-
sponding needs for which their own ships did not suffice (500
ships). And all the time the home population required to be
fed and supplied with other necessities of life (750 ships). By
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78 BRITISH SHIPPING CONTROL
this time every sea had been swept, every trade denuded, to
obtain every possible ship. Communications with neutral countries
had been broken ; the importing needs of coastal services of the
Dominions restricted to a bare minimum. The distant trade of
the country was reduced to a few vessels built for special work
in confined seas, and unsuitable for general work ; some even
of these had in the extremity been hazardously pressed into
service ; and there was still no margin. And all the importing
departments and combatant services were crying out for more
ships, each with the menace of an imminent breakdown which
would be fatal to the continued prosecution of the war.
The ultimate needs of the scores of miUions of individuals
who required commodities needing transport were sifted many
times through a series of sieves of smaller and smaller mesh,
but never small enough, before they reached the executive point
of requisition and allocation. The increasing prices did something
to reduce demand. The big control departments, the Food and
Munitions Ministries and the War Office, received the demimds
of their nmnberless branches, examined and pnmed them down ;
though always with the f eehng that the other departments might
reduce more drastically, always with the hope and the demand
for more ships than could possibly in the event be given. The
Ship Licensing Committee was (to a very hmited extent) pruning
off the most obviously imnecessary use of ships and thus making
a levf more available.
The Tonnage Priority Committee was examining the demands
in more detail and contributing to the s€ime end. Special com-
mittees, like the Imports Restriction Committee in January 1917,
or the more important and more continuous Cabinet committees
of the autumn of the same year, were forcing the departments to
effect reductions and to distribute and impose these reductions
on their subordinate organizations. The rationing of neutrals
for blockade reasons ; the Board of Trade mechanism by which
certain imports were prohibited altogether or only Ucensed within
limits ; the diminishing piurchasing power of the whole world and
in some cases the absence or reduction of materials available for
transport ; the ' bunker pressure ' on neutrals to do work useful
to the AUies and so reUeve the demands on their ships, were all
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COMPLETION OF SfflPPING CONTROL 79
contributing to the same efFect — ^to reduce the excessive demands
made on the shipping department.
The total needs for tonnage were received by that department,
handled and translated into terms of so many ships at given
places and by given dates by the three executive branches (Naval,
Mihtary, and Commercial) and as such presented as indents on
the Requisitioning Branch, which controUed the central pool and
its allocation. And this indent in total always exceeded the total
in the pool. So each week the heads of these four branches met
in an unofficial committee for a final pruning of the total demand
and a final arrangement of the current shipping programme.
When the arrangement was effected, subject to the many
modifications that even a week entailed, Requisitioning Branch
did its best to dispose of the vessels which were still available for
either requisition or change of service. A plan was always being
constructed but never completed, for even while it was being
framed the submarines would be busy, or a military emergency,
or later statistics of food prospects and food requirements, or
renewed pressure from some crippled industry, or a new complaint
from a Dominion which foimd the ships of its coastal trade
mysteriously spirited away, or the escape of a raider, or any
one of a thousand incidents and accidents, would modify the
perspective and require a change in allocation.
This from one particular angle was the system, elaborate,
overlapping, conflicting, unsynunetrical, rather clumsy, rather
chaotic, but growing with the need and in the result effective,
by which British ships were allotted to their several tasks so long
as the task remained primarily national.
Entby of Amebica
This same year, which witnessed the introduction both of the
new submarine campaign and of the convoy system by which
it was defeated, was also the year of America's entry into the
war. This changed the whole character of the Allies' economic
problem. Finance was at once displaced as the governing con-
sideration in the Allies' poUcy. Henceforward the Alliance as
a whole was practically self-sufficient. Money was only wanted
within measurable limits for purchases from neutrals and money
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80 BRITISH SHIPPING CONTROL
for purchases within the Alliance could always be created by the
votes of a Parliament or a Congress. Ships, however, could not,
and henceforward the whole Allied economic supply programme
began to be considered not in terms of what the Allies could afford
to buy but in terms of what they could find tonnage to carry.
In the meantime America's entry did not in any way relieve
the immediate shortage of tonnage. She had a considerable
mercantile tonnage, about 1,500 ships at this date (about half
of which were suitable for overseas trade); but they were
engaged in apparently important work, and the American Govern-
ment had as yet no system such as that which the war had
developed in Great Britain for selecting, requisitioning, and
forcing ships into immediate war employment. The whole
American organization was still to be built. At the same time,
while America's entry into the war brought no substantial new
tonnage immediately available for war service, her military effort
began very soon to increase the general strain on the tonnage of
the world. In the event, this military effort developed to such
dimensions and at such a pace, that great as were America's subse-
quent additions to war service, she never had as many ships in this
service as those required to carry her own men and stores. Her
entry into the war therefore immediately, and in one sense
throughout the remainder of the war, made the AUied task of
finding transport for their war stores more rather than less
difficult.
After a two months' visit to America in June and July of
this year the writer came back firmly convinced (1) that for a
long-continued war America's shipping contribution would be
decisive ; (2) that her building resources were such as to make
a building programme of 6,000,000 tons a year a practicable
proposition, and that building of these dimensions, once attained,
should be an effective counter to the submarine campaign on the
rate of losses at that time ; (3) that no alleviation of the Allied
problem in shipping could be expected from American ships at
any rate until the spring of 1918; (4) that it was of the ubnost
importance, therefore, that a renewed effort should be made
to enforce such restrictions on the British imports as would give
a margin for the now desperate needs of France and Italy, and that
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COMPLETION OF SHIPPING CONTROL 81
for this purpose the continuous work of a committee with Cabinet
authority was necessary ; and (5) that once this had been achieved,
national action required to be supplemented by an Allied organi-
zation to deal with both shipping and supplies.
The general lines of the development which was to take place
in the last year of the war were thus already beginning to shape
themselves dearly.
The Shipbuilding Effobt of 1917
The end of the third year was marked by one more event
which had important results before the end of the war. A great
effort was made to counter the losses by increased building.
Little has so far been said about shipbidlding, for Uttle was
achieved in the first three years. Moreover, such action as was
taken had little direct relation to the economic system detailed
in this book. The results achieved were of course an important
factor in the shipping position, but the organization through
which they were secured was a separate one. It will be convenient,
however, to preface the description of the renewed effort now
made by a brief note as to the building position throughout the
war.
Before the war Great Britain's supremacy was even greater
in building than in the size of her mercantile marine. In 1913
British yards laimched about 2,000,000 tons gross and the rest
of the yards of the world about a milUon. In 1914 her total was
still over 1,600,000. After that, however, the claims on men
and material of the Army and munitions had the most serious
<^ect8. In 1915 the total fell to 660,000 tons and in 1916 to
630,000 tons.
By this time the losses were becoming serious and building
seemed Ukely soon to cease altogether. In a general system of
official control what is left to private enterprise fares badly.
The prospect of requisition at Blue Book rates made the ship-
owner loath to order. The control of labour and of materials by
Crovemment departments who wanted both for other purposes
made it difficult for the builder to execute even such orders as he
received.
The responsibility for shipbuilding was entrusted at different
U69.83 a
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82 BRITISH SHIPPING CONTROL
periods to the Ministry of Shipping, the Admiralty, and to an
independent Controller-General with direct access to the Cabinet
Li spite of changes of oiganization and responsibility, however,
a consistent and effective policy was pursued throu^iout the last
two years of the war. Bette* supplies of steel were secured,
workmen were withheld, or withdrawn, from the Army. Private
yards were specialized, and a single yard, instead of building haU
a dozen types of vessel, concentrated upon one. Careful arrange-
ments were made to adjust the supply of boilers and engines to
the building of the ships requiring them, so that neither had to
wait for the other. La 1917 the innumerable types of vessels
previously built in British yards were limited. About 12 types
were selected, and future vessels, known as ' Standard Ships ',
were built to these types. By the beginning of 1918 the number
of standard ships was 42 per cent, of the total building, and by the
end of the year it had reached 76 per cent. The same year saw a
further important development in the establishment of national
shipyards, which would have made important contributions to
the output in 1919 if the war had continued.
The result of these measures was to increase the launchings
from the 630,000 tons of 1916 to 1,229,000 in 1917, and 1,579,000
in 1918.
This was a notable improvement. The output, however,
never reached the dimensions of the last peace year 1913. The
priority given, and rightly given, on the situation as known at
the time, to naval vessels, to the recruitment of the Army, and
the supply in priority of both men and material to munitions,made
the revival of building extremely difficult. The effort was much
greater than the figures themselves would suggest because of the
immensely increased work required for building vessels for the
Navy and for repair work. Heavy repairs of merchant vessels
in 1918 amounted to about 3,000,000 tons. It was better to
repair a damaged ship than to build a new one.^
The most notable and important effort at shipbuilding,
however, was not Great Britain's but America's. Before the war
shipbuilding in North America was almost insignificant, her out-
^ The table printed on p. 868 shows the progress in British building id
relation to losses throughout the war.
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COMPLETION OF SfflPPING CONTROL 88
put in 1913 being only 276,000 tons as compared with Great
Britain's 2,000,000. She had neither the plant nor the experience
to enable increased building to be rapidly improvised. She was^
however, in other respects in a particularly favourable position to
develop her building resources when new ships were most required.
She entered the war just when the intensive submarine campaign
was at the height of its success and when merchant ships were
the first necessity of the AUied cause. Her resources in men and
materials were untouched and incomparable. She was the
greatest steel-producing country in the world, and, though she had
not devoted her efforts to shipbuilding, she had resources and
experience in mechanical work which made it easier for her to
turn to this new work, than it would liave been for any other
country. The European AUies had samficed everything in the
earUer years of the war to what were then the predominant
necessities, the recruiting of the Armies, the increase of the
Navies, and the manufacture of munitions^ and had committed
their resources too far to render a big effort in shipbuilding
possible. Now, in the fourth year, merchant ships ranked for the
first time as equal and perhaps superior in importance. This
presented an opportunity for a specific, appropriate, and decisive
contribution by America. It was only in the following year,
1918, that the need for combatants again took an even more
important place, and that it became clear that America's supreme
contribution would after all be in men and not in ships. For
the time, the case for an immense effort in shipbuilding was
decisive.
America had in 1916 established a Shipping Board designed
to assist the development of a mercantile marine for conmiercial
purposes. This board was now entrusted with the very different
task of meeting the immediate needs of the war. It created an
Emergency Fleet Corporation charged with the special duty of
ship construction and itself dealt with questions of general
shipping poUcy. Unfortunately there was a serious delay before
construction was begun on any large scale. The first chairman
of the American Shipping Board was anxious to develop the
building of wooden ships. The first general manager of the Fleet
Corporation wished to concentrate on steel building. The dispute
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84 BRITISH SHIPPING CONTROL
ended with the removal of both officers. But in the meantime
two very valuable months had been lost.
Once organization began, however, it was developed at a pace
comparable with the development of munitions establishments
by the European Allies. In April 1917, when America declared
war, there were only 37 steel shipyards (with 162 slipways) and
24 wood shipyards (with 72 shpways). All these yards were
full, 70 per cent, being engaged with naval orders and the remainder
with ships on order by private merchants or Allied or Neutral
Governments. By the Armistice there were 223 yards with
1,099 ways, of wlidch 40 per cent, were for the building of sted
ships. In 1913 America produced only 276,000 gross tons of
merchant ships. Towards the end of 1918 she was producing
3,000,000 gross tons. In 1919 her total production equalled her
programme of 6,000,000 tons d.w. (or about 4,000,000 tons gross).
These are the results, in the briefest summary, of an inunense
constructive effort, of which the full tale has just been told by
the second chairman of the Shipping Board in the New Mercantile
Marine. The reader will read in that book the incidents of this
great effort ; the * 4 minutes campaign ' to enrol labour ; the
foundation of the immense Hogg Island Yard, where a ship was
launched ten months after the ground was first broken ; of the
invention of the ' fabricated ' ship which was ' manufactured '
instead of being ' built ', its standardized parts being made in
a hundred yards and ' assembled ' only in the shipyard. The
achievement was a wonderful example of the rapid adaptability
of modem engineering skill in a coimtry with ample resources in
men and materials and an adequate incentive to rapid effort.
The rest of the world's building during the war, outside Great
Britain and America, needs Uttle mention. It averaged 600,000
tons a year.
Summary of the First Three Years
So the third year ended in grave danger and under the most
urgent necessity for a more complete and effective organization
of control and restriction than had yet been achieved.
We have seen how the situation had throughout the whole
three years become steadily and continuously worse.
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COMPLETION OF SHIPPING CONTROL 85
The first year had begun with a plethora of tonnage and
ended with a merely rdative scarcity. During that year the
position never developed beyond the point of inconvenience.
Freights were high and rising. The normctl processes of commerce,
through which the great bulk of the country's supplies continued
to be imported, were disturbed both by the uncertainty of
freights and interruptions by requisition. There was still,
however, ample tonnage for all the Grovemment requirements and
all important civilian needs, though the operation of the freight
market distinguished expensively and defectively between the
important and the unimportant. The increase in rates due to
ihis relative, not absolute, shortage was beginning by the end of
this first year to become a real factor in the increased cost of
living. Administrative difficulties were experienced both in
requisitioning equally as between owners and wisely as between
the different commercial services for which ships were needed.
The main factors in this relative shortage of ships were first,
the withdrawal of tonnage for war purposes and, second, the
extra delays in port in loading and discharging ; actual losses
by submarine and raiders aggravated the shortage, but were not
yet a main factor in it.
The second year of the war began with an inconvenient
shortage of tonnage and ended with a position of serious difficulty.
Government requirements and port delays were still the main
causes, but the losses increased and were no longer met by the
declining building output. They became by the end of the year
a main factor in the position. The normal economic system,
which even in the first year made its adjustments between supply
and demand expensively and wastef ully, now broke down in every
direction. Grovemment control was extended over the most
important civilian supplies and was clearly foreshadowed for the
rest.
The third year of the war began with a position of serious
difficulty and ended with one of grave danger. The prospect in
the latter half indeed was perhaps blacker than at any time of
the war. Control was extended over practically all commodities ;
all ships, tramps, and liners alike, were brought under requisition.
Restriction and economy were enforced in every direction.
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86 BRITISH SHIPPING CONTROL
Control, however, though wide in its range, was as yet incomplete
in its organization. There was no adequate system for measuring
the needs of one supply against another, of wheat against munitions ;
still less for measuring the relative needs of the different Allies.
The immense losses under the intensive submarine campaign
made every practicable measure seem inadequate. Towards the
end, however, two avenues of hope were opened. America's entry
offered the prospect of great though not immediate relief ; and
the convoy system reduced the losses.
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CURyHSHOWiNGTHHNEI DIFFERHNCH BET\4^N NEW CONSTRUCTION
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ENEMY ACTION (SUBMARINES, MINES,RAIDERS &)
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PART III
OTHER ELEMENTS IN BRITISH CONTROL
CHAPTER I
CONTROL OF COMMODITIES
The extent of Ck)ntrol. The order of its development. Food Ck>ntiol. The
Wheat Executive. Munitions. War Office Ck>ntrol8. Board of Trade Ck>ntrols.
We have now followed in outline the growth of British national
control of shipping during the first three years of the war. To
be properly imderstood, however, it must be seen in the setting of
the lai^r network of economic control of which it was a part.
Throughout the same period a parallel organization was being
developed for the control of commodities. There were constant
interactions between the two systems, for, as we have seen, each
extension of the requisitioning of ships normally followed as
a consequence of an extension of control over some new class of
imported commodities. Enveloping these two systems, designed
to assist the supphes of Great Britain, was the blockade system
designed to exclude those of the enemy, and incidentally involving
the most serious consequences to the economic life of neutrals.
Thirdly, as the main cause of the AUies economic problem, was
the counter-blockade imposed by the enemy's submarine cam-
paign. We must see something of each of these three systems if
we are to understand either the national organization already
sketched or the new AUied organization which developed in the
last year of the war, and is described in Part IV of this book.
Lastly, the motive of economy, the desire to reduce costs and
profits, was so important a factor in the whole development that
it will be well to devote a special chapter to this subject.
The present chapter I therefore gives a slight sketch of the
control of commodities in Great Britain; Chapter II, of the blockade
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CONTROL OF COMMODITIES 89
and the relations with neutrals which it involved; Chapter III, of
the part played by freights and profits ; and Chapter IV, of the
struggle at sea.
Control of Commodities
Under the special conditions of the war, as we have seen, the
normal contest of the individualist and the Sociahst was sus-
pended. The need for control, under the novel and imperative
necessities of the time, gradually became too patent for reasonable
dispute. In one sphere after another the departments were com-
pelled by force of circumstances, and sometimes with obvious
reluctance, either to make private enterprise the controlled servant
of the State or to replace it. Ultimately the manufacturers of
the country were nearly all dependent for their materials and their
labour upon official allocation ; their profits and their prices were
limited by official regulation ; and over 90 per cent, of the imported
suppUes of the country were bought, transported, and distributed
imder official arrangements. It is impossible to describe the
immense and complex system which thus extended its hold over
the whole economic life of the coimtry. This system was, however,
the basis and origin of the subsequent AUied organization. We
must, therefore, glance at a few of the features in it which are,
from our point of view, of the chief importance.
Food claimed attention first. But action began modestly with
sugar and frozen meat, and after the immediate measures taken
in these two cases in August 1914, there was a long pause, with
no important development for two years. It was only in the last
two years of the war that the main food suppUes caused really
grave anxiety, and it was only then that official control became
comprehensive and complete! In the first two years it was the
direct requirements of the combatant forces that claimed atten-
tion. The main system, therefore, developed out of the need of
munitions and Army suppUes, and was built up by the Ministry
of Munitions and the War Office. Last, and least complete, were
the measures taken by the Board of Trade to limit the prices, and
to determine the distribution, of the materials required mainly for
civiUan purposes.
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Food Control
The first important commodity which necessitated Govern-
ment action was sugar. Of 2,200,000 tons of sugar imported in
1913, about 1,800,000, or over three-quarters, were derived from
Germany and Austria-Hungary. There was clearly, therefore, an
imminent danger of a serious shortctge in one of the most important
foodstuffs. The Government acted promptly, and made lai^
purchases within the first fortnight of the war. On August 20,
1914, they appointed the Royal Commission on Sugar Supplies to
purchase, sell, and control sugar for the Government. This Com-
mission successfully maintained a reasonably adequate supply of
sugar throughout ihe war. It made good the loss of German and
Austrian sugar by purchases from the West Indies, Cuba, and
Java, and it arranged distribution throughout the trade. At first
it proved sufficient merely to instruct the retailer to sell at a certain
price, under penalty of withholding supplies in case of disobedience.
Later, however, more drastic measures became necessary, and the
distributing trade became in effect the agents of the Grovemment,
selling on public account at a fixed rate of profit. The shortage
of transport, of course, compelled the rationing of sugar and the
reduction of actual consmnption to considerably less than the
normal consumption of peace time. But the ration never fell
below eight ounces per person a week ; that is, in all the diffi-
culties of the war, it never fell to so low a figure as the six ounces
found necessary for a short time after the war had ended. The
Sugar Commission was in 1917 brought under the general authority
of the Food Controller, but was never incorporated within the
actual machine of the Ministry of Food. Rationing was indeed
carried out by the Ministry and not by the Commission. But for
the rest the work of controUing sugar, like the later work of
controlling wheat, was throughout carried out under the orders
of a committee mainly composed of experts from the trade. As
early as February 1915, the sugar bought by the Commission was
transported in British ships requisitioned at Blue Book rates by
the iSransport Department.
At the beginning of the war also the Board of Trade, at the
request of the War Office, purchased the supplies of frozen meat
required for the Army, and requisitioned insulated space in liners
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CONTROL OF COMMODITIES 91
for its transport. This involved a responsibility also for the civilian
supplies of frozen meat, but no action^ was taken till much later
in the war with regard to fresh meat.
Control of wheat began later, and was tentative and cautious
in its development. Unlike sugar, wheat was partly produced at
home, and the balance was normally drawn not from enemy
countries but from the rest of the world, whose supplies were still
open to the United Kingdom, in so far as transport could be
provided. The Government did indeed purchase a small amount
of wheat designed to serve as a reserve stock. The conditions of
its purchase were, however, carefully arranged so as not to
disturb the ordinary purchase and importation of wheat under
commercial conditions for normal current consumption. Importa-
tion by private enterprise continued in operation, and on the
whole successfully, though at increasing prices, until the latter
part of 1915. By this time, as elsewhere explained, transport
became a serious difficulty, and the merchants were given special
assistance in chartering freight. A year later difficulties of supply
and increased difficulties of shipping rendered these half measures
inadequate, and the complete control of purchase, importation,
and distribution, on similar principles to those already in force
for sugar, was undertaken by the Government through the Royal
Commission on Wheat Supplies. This Commission continued
throughout the war to exercise over wheat, and later over all
other cereals, the same kind of control as that in force for sugar.
The task was in this case, of course, much more complex, firstly
because the supply came partly from home sources, and was there-
fore much more difficult to ascertain and control, and secondly
because of the greater importance, quantity, and variety of cereals.
The appointment of the Commission was almost inmiediately
followed by a further development of the utmost importance.
A Committee, called the Wheat Executive, including repre-
sentatives of France and Italy as well as Great Britain, was
formed to arrange for the wheat supplies of all countries to be
bought together and allotted by agreement. This Committee,
which was extremely successful, was the model of the whole of
the subsequent Allied organization. The advantages of co-
operation were at once apparent. They were indeed so great that
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92 ELEMENTS IN BRITISH CONTROL
by the end of the war the Wheat Executive was arranging the
suppUes not only of the Allies but of a large proportion of neutral
countries. Combined purchase avoided competition between the
largest buyers in the market and restrained the rise in prices.
Other economies were effected. We may mention one of special
importance to shipping. The American wheat supplies were not
enough for the Allied needs, and large quantities had to be drawn
from Australia. To France, Italy, and Great Britain alike North
America is, of course, the nearest source. Each country desiring
to economize in transport therefore had an interest in getting
American wheat. But Australia is nearer to Italy than to France
and Great Britain, and North America is nearer to Great Britain
and France than to Italy. To exchange an Itahan cargo in North
America for a British cargo in AustraUa thus meant a saving of
2,000 miles of stecuning. Italy, therefore, by agreement, drew
more from Australia and less from America. She was com-
pensated with extra ships, and the net saving was to the advantage
of all three coimtries. It was no longer a common thing for empty
Italian ships going westward for American wheat and empty
British ships going eastward for Austrahan wheat to pass each
other in the Straits of Gibraltar or the Mediterranean.
In December 1916 the Ministry of Food was created and in
the following year food control in Great Britain extended from
the comparatively simple task of purchase to the infinitely more
intricate work of distribution. Sugar was rigorously rationed
to the individual, meat to the retailer. Wheat Was saved by
milling regulations which resulted in a more economical and less
palatable loaf. Distribution was controlled through the 100,000
retail shops. It included not only bread, meat, and sugar, but
a host of articles of other subsidiary foodstuffs. The whole supplies
of the country were supervised through Food Commissioners in
sixteen large administrative divisions, and through Food Com-
mittees in every borough, urban, and rural district.
In the same year the external arrangements were also placed
on an official basis. The Australian and Indian Governments
already sold as Grovemments, an(l made their own internal
arrangements with the individual producers. But the Allies had
hitherto still dealt with the private trade in Central and North
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CONTROL OF COMMODITIES 93
America. In June 1917, however, a Canadian Food Controller
was appointed, and in August the American Food Controller
obtained power to fix prices. Henceforth wheat was bought from
North America, Australia, India, and Canada on the basis of
bulk agreements between Allied Grovemments. The Argentine
was the only producing country of the first importance left outside
the central system of official control.
The success of the Wheat Executive led to an extension in
Allied co-operation. Its own sphere was widened to include all
cereals as well as wheat ; the Sugar Commission purchased in
consultation with the authorities in France and Italy ; new Allied
Executives were formed for meats and fats, and for oil seeds.
By the end of 1917, however, the Wheat Executive was the
only one of these Committees which was in full and effective
working, and in every case the shipping required was arranged
independently by each importing Government.
Munitions Conteol
The Ministry of Munitions, created in Jime 1915, gradually
brought under its authority the manufacture of munitions through-
out the country, establishing its own factories and controlling
in the most rigorous detail the manufacture in private factories.
For the latter purpose an elaborate system of ' costing ' was
devised, i. e. a System of ascertaining the exact cost of each
operation under different conditions of manufacture. The price
of the finished article was then limited to this cost plus an addition
which gave a sufficient margin of variable profit to offer an induce-
ment to rapidity of output. The Ministry also gradually took into
its own hands, through numerous intermediary stages and by
many methods, the purchase, import, and distribution of the raw
materials, covering practically all the metal imports of the coimtry
required for the manufacture of munitions.
When war was declared a few guns and rifles were being made
at Woolwich and Enfield, and a few explosives at the Royal
Powder Factory. But even the small army then contemplated
was d^endent upon private manufacture, and neither public nor
private factories could cope with more than the smallest fraction
of the new requirements.
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94 EI^MENTS IN BRITISH CONTROL
Before the end of the war the Ministry of Munitions had
brought the whole under public control. We have here, however,
no space to do more than glance at the main principles and
motives of this Ministry.
For this purpose the action taken with regard to steel, the
basis of the great mass of munitions, will serve as well as any.
Here, as elsewhere, action was first forced by the desire to limit
prices. The War Office were buying for Woolwich and Enfield
and the Army repair shops, private firms were bujdng for both
public and private work. The American market was being
demoralized by the competitive piu*chases of British armament
firms. The Ministry at once fixed a maximiun price for shell
steel. This quickly compelled further action, for the price of
' conmiercial steel ' rose higher, and manufactiu^rs began to con-
centrate on it. This was necessarily at the expense of shell steel,
and prices had therefore to be fixed for all classes of steel alike.
The Ministry were next compelled to arrange the distribution
of the steel available among the many factories and departments
who needed it ; for once prices were fixed, nothing but deliberate
allotment could decide who was to get the steel available. Soon,
as the costs of labour, freight, and ore all rose, the fixed prices
failed to give a profit to the manufacturer. The Ministry coiJd
of course have raised the prices, but in the meantime they had
arranged innumerable contracts with manufacturers, to whom
steel was a raw material, on the basis of these prices, and were
anxious not to disturb them. They preferred, therefore, in most
instances a system of increasing subsidies, some direct and some
indirect. Economies in the freight of ores were seciured by
centralizing the chartering, and any excess above a certain amount
was repaid ; the price of the coke required by the manufacturers
was limited. Thus an intricate and artificial system of subsidies
was built up round the fixed prices, imtil it became exceedingly
difficult to determine the real cost of the steel. This elaborate
system, however, achieved its main object, and, with variations,
was continued throughout the war. In the meantime, an effective
priority organization had been built up to secure that steel went
where it was most needed, and arrangements were made to secure
co-operation with the Allies.
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CONTROL OF COMMODITIES 95
With an infinite variety of method, the Ministry .extended
a similar control over all the raw materials required for munitions,
over the metals, both ferrous and non-ferrous, and over the
chemicals required for explosives. But the varying difficulties
experienced, and the different expedients adopted for steel and
iron, ores, copper, zinc and spelter, lead, tin, platinimi, aliuninium,
oils, nitrates, coal tar, &c., cannot be here described. And the
control of the actual manufacture in ' controlled establishments '
and in national factories is even further from our theme.
Control of metals, as well as control of food, was in 1917
practically complete. The two new supply Ministries, the Ministry
of Munitions and the Ministry of Food, ultimately included within
the sphere of their direct authority 70 per cent, of the imports
of the country.
War Office Controls
In the meantime, very similar measures were being applied by
the War Office to the great bulk of the raw materials not dealt
with by the Ministry of Mxmitions. Wool, flax, jute, hides, and
leather were all required in enormous quantities for military
purposes. Purchase under competitive conditions through the
channels of the trade would not only have involved great
expense to the taxpayer, but would have made it almost impossible
to conclude firm contracts of any kind with the manufacturers.
No satisfactory contract could be made with a manufacturer of
Army uniforms, boots, or tents, if he could not know within even
wide limits what he would have to pay for his wool, his leather,
or his flax. The War Office therefore purchased the raw material
on behalf of the Government. To do this successfully, however,
it was necessary to have the monopoly of purchase, so as to
escape the competition of private national merchants. Having
acquired this monopoly, the responsibiUty for supplying the trade
for civilian consumption was necessarily thrown upon the Grovem-
ment. The War Office could have escaped this responsibility
with comparative ease by reselling to the trade such suppUes as
they did not want for their own use. But since the suppUes so
avaUable would have been less than the full civilian demand, the
prices for civilian clothing, boots, &c., would have risen ; and
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96 ELEMENTS IN BRITISH CONTROL
some districts and classes of the population would have been
unable to secure their barest necessities. The department there-
fore assiuned full responsibility for supervising in detail the supplies
of the whole country. In this work they used the costing system,
and developed and extended it. The price at which the raw
material was suppUed to the manufacturer, and the prices fixed
for the sale of the manufactured article by him to the retailer,
and by the retailer to the pubUc, were all so arranged as to give
a reasonable but practically fixed profit. In effect, over a large
area of industry, both the manufacturing and the distributing
trades, whilst still working under their normal processes, were
converted into agents of the Government, selling on Government
accoimt on the basis of conmiissions.
The imported suppKes so controlled by the War Office (wool,
flax, jute, hemp, hides, and leather) ultimately amounted to about
10 per cent, of the total imports of the country.
BOABD OF TbADE CoNTBOLS
Meantime, though much more cautiously and much less com-
pletely, the Board of Trade was establishing various forms of
regulation and control over nearly all the remaining imports. In
general this department was left with a kind of residuary re-
sponsibiUty for such articles as were not of the most essential
character for the inunediate purposes of the war or the actual
maintenance of the life of the civiUan population. It followed not
unnaturally, therefore, that the control in these cases proceeded
more slowly, was less complete in character, and was more com-
mercial in method. Various forms of control were ultimately
established under the general supervision of the Board of Trade
for timber (under a Timber Controller), for tobacco, for cotton
(under a committee formed from the trade at Liverpool), and for
paper and pulp (under a Paper Controller). These commodities
amounted to 15 per cent, of the total imports, and as certain
articles came under control of the Admiralty, well over 90 per cent,
of the total imports were finally brought under the control of five
large departments.
We thus see the whole economic syst^n of the country under
an official control, which varied both in method and in character.
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CONTROL OF COMMODITIES 97
but on the whole was surprisingly complete and effective. First
the National Government and then the Allies together became
the single purchaser of supplies imported from neutral countries.
They bought the produce of Dominions and Allies direct from the
Governments, or at prices fixed by them, and they requisitioned
at fixed .prices the produce of their own countries. They dis-
tributed both imported and home supplies under a rationing
system which in some cases took the manufacturers as the unit,
in others the retailer, and in others the individual consumer.
Distribution was most difficidt where the home produce was an
important part of the supply; acquisition was most difficult
where the supply depended on neutral sources. In the former case
all arrangements had to be made with a margin for error in
estimates and inequality in allocation. In the latter the efficacy
of concentrated purchase was assisted by every resource avail-
able ; by the control of shipping and of bunker stations ; by the
conditional supply of other commodities required by the pro-
ducing countries ; by diplomatic and political pressure ; and by
official agreements both with Governments and private associa-
tions of merchants.
This comprehensive control of commodities by each of the
Allied Governments was the compl^nent of their control of
shipping, and both were required as the indispensable conditions
of the joint Allied control which developed from them. ^
1M9.33
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CHAPTER II
THE BLOCKADE, NEUTRAL SHIPPING
The Blodcade. Declaration of London. The tightening iq> of the BloeJtade.
The Reprisals Order of March 1915. The Rationing Policy. The Ministry of
Blockade. The effect of America's entry.
Neutral Shipping, Its importance. General Allied policy to neutrals.
^Bunker Control.* The Chartering Committee. Shipping Agreements. The
Norwegian Coal Arrangement. Requisition. The Law of Angary. Neutral
Tonnage at the Armistice and its employment.
The complement to the measures to ensure and make the
best use of Allied supplies was the blockade system, which simul-
taneously restricted those of the enemy.
In this as in every other sphere the arrangements made during
peace were based on a conception of war as a struggle between
military forces and not between whole populations. The first
efforts at restriction encountered the most serious difficulties —
legal, diplomatic, and administrative — which resulted from this
conception.
*The recognized rules of maritime blockade in 1914 were those
contained in the Declaration of London, which was signed by
Great Britain in 1909 but never ratified. These rules distinguished
between ^ absolute contraband ', which consisted of articles only
useful for military purposes ; ^ conditional contraband ', which
consisted of those which had both military and civil uses, and
** non-contraband ', which consisted of those regarded as primarily
required for civil use. The first alone could be effectively stopped
in all circumstances ; the second only if consigned to an enemy
destination ; the third could not be stopped at all.
Under these rules the blockade would in effect have been
limited to preventing the import of finished munitions. ' Con-
ditional contraband' could have flowed freely into Germany
through the contiguous neutrals ; and many of the most important
of her military needs (rubber, hides, cotton, wool, and metallic
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THE BLOCKADE 99
ores) would have gone direct and without interference. The
blockade would have been entirely ineffective and would not have
been worth its expense. It gradually became apparent that the
distinctions in the Declaration were inapplicable to a war in which
the whole effort of the combatant nations was engaged. ^ In this
war \ as Ludendorff has said, ' it was impossible to distinguish
where the sphere of the army and navy began and that of the
people ended.' First raw materials and then food were, therefore,
brought within the orbit of the blockade, and by 1916 all distinc-
tion as to use or intermediate destination had practically dis-
appeared.
This was, however, a difficult and dangerous process. The
importance of the rules (which had never been ratL&ed by Great
Britain^ and therefore could be and were modified and abrogated)
consisted in the claims based on them by neutral countries, by
Sweden, Norway, Denmark, and Holland, who coidd offer transit
to Grermany, and by America, whose supply of munitions and other
commodities was vital to the Allies.
Immediately on the outbreak of war an Examination Service
was established at Kirkwall, the Downs, Port Said, and Gibraltar,
and the North Sea between the Orkneys and Norway was patrolled.
Merchant vessels were brought into port and examined there^ for
boarding and search at sea were rendered dangerous by sub-
marines, and officers afloat could not be kept adequately informed
of the intricate developments in policy. The Examining Officers
in the ports acted under direct, and constantly more stringent,
orders from London as to the vessels and cargoes which they were
to seize or release. In London the work of translating the develop*
ing policy into detailed rules and orders was undertaken by
a Contraband Committee representing the Admiralty and the
Foreign Office.
Naval seizure and search was, however, only one, and in time
perhaps not the most important instrument, of tiie blockade.
Throughout the war the Foreign Office were supplementing it
by elaborate and very effective agreements with neutral countries,
by whichy in return for permission to import themselves^ they
undertook to control export to Germany* There was throughout
competitive pressure on the contiguous northern neutrals by
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100 ELEMENTS IN BRITISH CONTROL
Germany, who could threaten to invade them, and by the Allies
who coidd withhold many vital supplies. In this competition the
balance inclined gradually on the side of the Allies, and the Allied
agreements became more and more complete* It was nearly
a year, however, before the blockade became really effective. In
the early months supplies of all kinds, except finished munitions,
flowed abundantly into Germany. Merchants had learnt how to
send ^ conditional contraband ' through the contiguous neutrals.
The diplomatic position, both with these neutrals and America,
was making more drastic action difficult; but it was evident
that without it the blockade might almost as well be abandoned*
The 'Rationing' System
Germany's declaration, however, that after February 1915 she
would instruct her submarines to attack all merchant vessels in
British waters, created an outburst of indignation in neutral
countries, which Great Britain at once used to make the blockade
comprehensive. In the Reprisals Order of March 11, 1915, she
announced her intention to stop all goods of enemy origin or
destination, and proceeded henceforth to stop supplies intended
for Germany, without regard to the distinction of the earlier
contraband rules or to the fact that the suppUes might be con-
signed through a neutral port. Even this, however, was not
enough. It was useless to prohibit every cargo of food destined
for Germany, whether sent through contiguous neutral countries
or not, if these neutral countries could themselves import freely
for their own uses, and with the sufficiency so obtained, export
their own produce to Germany by routes which the Allies could
not control. This was the reason for the 'rationing' poUcy,
which was begun in 1915, and subsequentiy became the central
feature in the whole blockade system. Detailed statistics were
compiled as to the pre-war imports and consumption of all the
neutral countries which had uncontrolled access to Germany;
and only enough war imports were allowed to give a bare sufficiency
for internal consumption. The neutral countries were therefore
compelled to adopt internal rationing measures, so that the system
of official control extended over almost the whole world — neutral
and belligerent alike. The actual privations of some of the neutrals
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THE BLOCKADE 101
were indeed much more serious than those in Allied countries, no
doubt partly because their export prohibitions were not sufficient
to prevent supplies slipping across the border imder the attraction
of very high profits. ^
In January 1916 the Ministry of Blockade was formed and
the whole system rapidly extended and made more stringent;
a few months later the last relics of the Declaration of London
were formally abandoned.
In the same year one further method of restriction was
employed, the purchase of supplies which would otherwise have
reached the enemy. The Norwegian catch of fish was bought,
and one of Germany's best substitutes for meat thus taken from
her. In August the pressure of Germany's food shortage became
much more severe through the entry of Roimiania into the war.
Germany had obtained large quantities of wheat from Roiunania
in 1915, and now that these were cut off, she took immediate
steps to recover them by invasion. Roumania was crushed five
months afterwards. This was too late to help Germany in the
winter of 1916-17, when her privations almost forced her to admit
defeat. She just survived and avenged her sufferings by the new
unrestricted submarine warfare of the following spring. For the
next year Roumania's supplies were available to her, and in the
winter of 1917-18 she suffered much less than in the previous
year. Meantime America entered the war; the diplomatic
difficulties of the blockade practically ceased, and the administra-
tive task was greatly facilitated. Prohibition of export from
America and the certification of cargoes before they were shipped
at once lightened the task of examination and reduced the losses
and difficulties of the legitimate merchant. The agreements with
the northern neutrals were made much more drastic with the aid
of new pressure which America could bring to bear, and the
blockade became not only comprehensive in its scope but complete
in its operation. The result was that, even wit^ the aid of Rou-
manian supplies, Germany was by the autumn of 1918 again
forced into a position comparable with that of two years before.
Their privations made the whole civilian population long for
peace more than, victory, and at this moment victory seemed less
than ever likely, for the successes of the spring had been followed
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log EIJEMENTS IN BRITISH CONTROL
by the overwhelming defeats of the summer and autmnn. In
what precise proportions privations at home and defeat in the
field contributed to the acceptance of the Armistice cannot be
stated. But the blockade may justly claim to have shortened, if
not to have won, the war. It succeeded at the moment when the
counter-blockade by the submarine had just definitely failed.
Neutral SrappiNc
It is with the conditions of the blockade in mind that we
must consider the arrangements made by the Allies to secure the
assistance of neutral shipping for the importation of their
suppUes.
Neutral shipping has always been a considerable factor in the
^uppUes of Europe. About a third of the British imports were
in fact normally brought in neutral bottoms before the war. The
Norwegian, Danish, and Swedish mercantile marines were both
before and during the war of special importance. They were
vital for the carriage of iron ore from Spain and Norway, of coal
from England to France, and were very useful for general overseas
work, including the importation of wheat, &c., from America. As
the war proceeded it became more necessary and more difficult to
obtain their services, and the methods adopted by the Allies are
interesting examples of administrative resources in the face of
a difficult economic and poUtical problem. The direct method of
reqmsition which AUied countries were able to apply to their own
vessels could not be used. In the early part of the war, therefore,
the Allies were forced to charter neutral tonnage in the open
market at competitive rates which their own necessities were
continually driving up. Neutral shipowners with exemption from
the belliga:«nts' liability to requisition, and chai^d with none of
the expense of clearing and protecting the high seas, reaped an
extravagantly rich harvest from the German submarine campaign.
Extra costs of running and the extra cost of insurance against
war risks were either explicitly placed as an additional charge
upon the charterer or became an almost n^ligible item in the
increased rates of hire. After a time the strain became more than
the Allies' finance could bear. They began therefore to consider
whether they could not make use of their other economic resources.
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NEUTRAL SHIPPING lOS
beyond the mere power of their purse, to help them in their
bai^ains. They proceeded with this new policy in various forms.
It is important, in order to see their policy in a proper per-
spective^ that, before considering these various methods of per^
suasion or compulsion, we shoidd have clearly in mind the general
facts of the sittiation.
Neutral shipowners who before the war were, like other
shipowners, faced with a prospect of low freights for at least
1914 and 1915, made instead unprecedented and exorbitant profits
wholly as the result of the war, of which the cost both in money
and in life fell upon the Allies, and was possible only through the
defence of the seas by the Allies' forces. And these profita were
made mainly from the Allies themselves.
The Germans finally used the physical force which they possessed
in their submarines and mines to destroy tonnage without regard
for the rights of neutrals, for international law, for the lives of
neutral seamen or the property of neutral shipowners. They sank
without warning, often without making any attempt to save the
lives of crews or passengers, without observing the limits of their
own arbitrarily determined war zone and without compensation
either to the owners of the property they destroyed or to the
dependents of the seamen they killed.
In contrast with this, the naval strength of the Allies was used
in such a way as not to endanger neutral tonnage, and was indeed
directly devoted to clearing the seas and to rendering them safe.
Throughout the war the Allies had complete command of the seas
of the world, and they could, as far as physical force was con-
cerned, have seized neutral tonnage and devoted it to their own
use. They could have urged more justification than iSke Grermans,
because their action would have b^n undertaken after, and as a
result of 9 the more drastic action of the enemy and also because they
would not have endangered the lives of the seamen, or destroyed
the property of the shipowners, nor even have deprived them of
a reasonable remuneration.
In fact, however, the Allies only proceeded slowly from free
charter to pressure, and from pressure to a very modified and
restricted form of compulsion. Neutral ships were never seized
on the high seas and put to Allied use, and the most extreme step
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m ELEMENTS IN BBITISH CONTROL
that was taken was to requisition certain neutral tonnage in Allied
ports and use it, with ample ocmipensation to the owner* It was
true that this was without their consent, but the ccms^t was
probably scnnetimes withheld more because of their countries'
desire not to offend the German Government, than through the
shipowner's unwillingness to let his vessels.
This, however, is to anticipate. In the period with which we
are for the moment dealing, a period prior to the intensive sub-
marine campaign, no such extreme measures were taken or
contemplated.
The first important method by which the economic resources
of the Allies were used to supplement mere chartering was to
attach conditions to the supply of bunkers from bunker stati<«s.
Great Britain and her Allies controlled the main sources of
siqiply of bunker coal in Europe and the Middle East, and the
main bunker depots on most of the great trade routes of the
workL This provided a most effective instrument by which to
induce neutral owners to allot their tonnage to work that was in
the interests of the Allies, as the following short statement of the
world's sources of supply and the principal coaling depots will show.
A. Europe. Hie British Isles represented practically the only
source of supply during the war, the amount of Westphalian coal
finding its way whether from Germany or Rotterdam being
negligible.
B. Africa and AvstrdUma. Durban, South Australia, New
Zealand, Newcastle (N.S.W.), and Freemantle.
D. India. Calcutta.
E. Fa/r East. North China and Japan.
F. America. Pacific Coast; British Columbia and Chili;
Atlantic Coast : New York, Baltimore, Virginia, and Pensacola.
Hie areas from which coal was obtained were thus under
British control with two exceptions, the Far East and the American
continent.
A consideration of the principal coaling depots of the world
shows a similar result.
A. On the main route from northern Eurc^ via the Suez
Canal to the East, there are Gibraltar, Oran, Algiers, Malta, Port
Said, Aden and Perim, Colombo, Sumatra, Hong Kong, and
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NEUTRAL SHIPPING 106
Batavia. All these, with two unimportant exceptions, were under
Allied control.
B. For the East Atlantic, there are Cape Town, Dakar, St.
Vincent, Canaries (Spain), Madeira, and Lisbon. All these drew
their supplies from Allied sources, and all, with the exception of
the Canaries, were under Allied control. There were thus left only
two main areas in which effective control could not be exercised
through bunker pressure, that is, the American waters and
Japanese waters. The danger that European neutral tonnage
would escape from Allied pressure by seeking trade there was not
a serious one, as both routes were dming this period well supplied
with tonnage.
Pressure was therefore applied to induce neutral vessels to
accept employment useful to the Allies by making this a con-
dition of their supply with bunker coal. The actual administrative
arrangements, which were made through the Admiralty (Trade
Division), though in close liaison with the Transport Department,
took various forms. Vessels suitable for North Sea and Channel
work were required, for example, to complete two voyages of
certain specified kinds as a condition of receiving the bunkers for
those two voyages and a third, which might be any the owner
wished so long as it did not profit the enemy.
In 1916 the constant rise in the freights for pit-wood and
Narvik ore from Scandinavia was met by a similar use of the
British coal monopoly in relation to domestic needs of coal.
Scandinavia depends very largely upon the United Kingdom for
her coal supply, and a rule was made that all vessels loading in
the United Kingdom for Scandinavia should return with cargo,
unless furnished with a certificate of exemption. The effect of
this regulation was an immediate fall of 30 to 40 per cent, in the
rates and an increase in the importations of iron ore from Narvik.
The neutral ship which had once given her undertaking and
obtained her coal was carefully watched by the Shipping Intelli-
gence Section, and, if she broke her engagement, was at once
reported, with the result that she was refused bunkers for a suffi-
cient time to prevent similar breaches of obligation in future.
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106 ELEMENTS IN BRITISH CONTROL
Central Chartering
Useful, however, as the above methods were, they were
normally and mainly used only to supplement and assist the
ordinary process of chartering neutral tonnage in the open market.
In this process itself one important development of Allied organiza-
tion proved necessary, and was efficiently achieved* In the early
part of the war the AlUes were not. only competing for neutral
tonnage with the rest of the world, but were competing among
themselves as well. Finally, however, in 1916, the Chartering
Committee, with representatives of Great Britain, France, and
Italy, was formed, and henceforward went as a single competitor
into the market. The inunediate effect was to arrest what was
at the time a rapidly increasing freight rate, and even when the
pressure upon tonnage became seriously greater, the system un-
doubtedly retarded and reduced the rate of increase. New methods
were required in 1917 to bring neutral ships within the net of the
Chartering Committee. It is important to notice the limits of
control by ' bunker pressure '. The monopoly of bunkers, without
which ships cannot move, is a very effective instrument for
determining what cargoes ships which desire to sail shall carry.
It is of no power whatever to compel ships which do not want to
move to do so. And one of the first and most dangerous results
of the intensive submarine campaign in 1917 was to make many
neutral shipowners prefer to lay their ships up in their home porte
rather than run the new and more formidable risks. Against this
poHcy, which would have been disastrous to the AUied cause,
further measures had to be adopted. The economic bargaining
resources of the AUies in their wheat and raw materials had to be
more fully used.
Bargaining of this kind involved dealing with Governments,
and not with individual shipowners. In the third and fourth years
of the war therefore we find the Allied Governments making
shipping agreements with the northern neutrals for the acquisi-
tion of larger blocks of their tonnage. Concessions in the blockade
system, under which the countries contiguous to Germany were
themselves rationed, were used as factors in the bargain, together
with every form of economic or poUtical pressure available.
A particularly interesting example is the arrangem^it made by
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NEUTRAI. SHIPPING 107
Great Britain to organize the whole coal imports of Norway, both
the supply of the coal from Great Britain and its transport to the
necessary ports, in retmn for Norwegian shipping. By such
methods, and with the further inducements of high rates, important
blocks of tonnage were obtained from Norway, Denmark, and
Sweden, though in some instances the condition was made that
the shipping should not be used in the war zone.
As the submarine campaign developed, however, even these
measures proved insufficient. Some of the neutral Grovemments
were reluctant to incm* the hostility of their powerful neighbom*
by voluntary agreements. The Allies therefore resorted finally td
compulsion. Great Britain maintained her neutral traffic by
^ refusing clearance ' to neutral vessels in her ports (i.e. preventing
them from leaving) except on a * ship for ship ' principle — ^i.e.
a given, number of vessels of a particular country were allowed
to leave only when an equal number arrived. Early in 1917
a useful discovery of a principle in international law was taken
as the justification of further action. The so-called ^Law of
Angary ' was held to justify the seizure by a country at war of
any property in its territory whether the owner was a national
or a neutral. It was first used to obtain a nmnber of Danish ships
and then the whole surplus of the Norw^ian mercantile marine,
after negotiations with the owners and with arrangements for
adequate compensation. It was later used for the compulsory
requisitioning, without either the explicit or tacit consent of
either owners or Grovemment, of a large quantity of Dutch shipping
which had long lain idle in American and British ports, America
obtaining in this way the use of some half -million tons and Great
Britain about half as much. Ample rates of hire were of course
paid, and it may be doubted whether the neutral owners, who
found an unremimerative property suddenly very lucrative, nor
even the neutral Government, who could plead force majeure^
regretted very deeply that the Allies took by force the vessels
which they could not voluntarily charter.
The importance and the success of the Allied negotiations with
the neutrals can best be shown by statements showing the amount
of tonnage owned by each of them, and the way the whole tonnage
was employed at the time of the Armistice.
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108 EIJEMENTS IN BRITISH CONTROL
Neutral Tonnage at the Armistice
Emflothknt ov Nbittbal Tohhaob at TBI Abmisticb (ovxb 500 tons)
Ih import service of Allies
In military service of Allies
In imjport or other service of neutrals
Repairing or laid up ....
Ships.
QroaBTcfmuMQt,
690
1,175,000
50
86,000
879
2,053,000
ao2
702,000
Of the above tonnage, 179 ships of 806,000 gross tonnage were
in the pool of neutral tonnage chartered by the Inter- Allied
Chartering Committee, and employed under directions issued
under the authority of the AlUed Maritime Transport Council.
It will be seen that 38 per cent, of the neutral tonnage of over
600 gross tons, excluding what was under repair or laid up, was
in the service of the AlUes, and 62 per cent, in the service of the
neutrals themselves.
The above statistics, however, only include chartered neutral
tonnage, which continued to fly neutral flags. In addition about
330,000 gross tons of requisitioned neutral tonnage sailed under
the American flag, and about 270,000 tons under the British and
French flags. This tonnage was treated as AUied tonnage and it
is not possible therefore to distinguish it for the purpose of
classifyhig its employment and adding it to the above table. It
will be seen tha^ with this additional quantity, about half of
the entire neutral tonnage of the world was in tiie direct service
of the Allies. This supplement was of vital importance during
the last critical year of the war.
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CHAPTER III
FREIGHTS AND PROFITS ^
High Freights the Origin of Control. The Responsibility for High Freights :
not the Shipowners\ The Difficulties of Ck>ntro]ling Freights and Profits.
The Government ('Blue Book') rates moderate. Alternative methods of
limiting profits, llieir defects. The ultimate solution. Control of Shipping
combined with control of conunodities. Pre-war Profits. War Profits. Aggria-
vating Factors.
DuBiNG the last two years of the war shortage of shippmg
became much more important than shortage of money. The
extension of requisition, and other forms of control left only
a small part of the AlUes' transport to be obtained by competition
m an open market. The main effort of the Allies, without regard
to other considerations, was to carry only the most essential
articles, and to obtain the last ounce of importing capacity out
of their ships. Rates and cost ceased to be a primary and dominant
consideration. Looking back from after the war it is thus difficult
to realize that throughout the whole period in which the control
organizations were being built up the dominant and impelling
motive was economy. It was this which gradually induced one
supply department aiter the other, the War Office, the Ministry of
Of unitions, the Ministry of Food, to control home manufacturers
and merchants, to centraUze their purchases and buy on Grovem-
ment account, and, as a natural consequence, to ask for Government
tonnage obtained by requisition at Blue Book rates. The com-
modity controls, first over sugar and wheat, and then over grain,
wool, flax, hides, and timber, over metals and all the main raw
materials of the country, were forced into existence by the necessity
for limiting and controlling prices. This was a main object bolii
in b^inning requisition in 1914 and in extending it to secure
transport for eadi new class of supplies purchased by the supply
departments. It was also the main factor in forcing the final step
in 1917 of extending requisition over the whole of the British
mercantile marine. The speech of Mr. Lloyd George when he
became Prime Minister at the end of 1916, indicates the position
very clearly (December 1916).
^ It is fah that, in considermg the shipping profits of the war period
(with which alone this chapter detds) the reader should bear in mind the feurt
that serious losses have been sustained in 1920-21 . J. A. S.
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110 ELEMENTS IN BRITISH CONTROL
' It (shipping) has never been so vital to the life of the country
as it is at present, during the war. It is the jugular vein, which,
if severed, will destroy the life of the nation, and the Government
feel that the time has come for taking over more complete control
of all the ships of thiscountry and placing them in practically the
same position as are the railways of the country at the present
moment ; so that during the war shipping will be nationalized in
the real sense of the term. The prodigious profits made out of
freights are contributing in no small measure to the high cost of
commodities, and I have always found not only that, but that
they are making it difficult for us in our task with Labour.'
This announcement was soon followed by a decision to requisi-
tion the whole British mercantile marine at Blue Book rates.
The Responsibility fob High Fbeights
It is important, however, before reviewing the very striking
facts, to measure exactly the restricted limits of the responsibility
of shipowners themselves in the matter. It is useless and foolish
to blame owners for refusing to take more than five shillings when
offered ten. So long as the commodities requiring transport were
being purchased by private merchants and sold under competitive
conditions, the only result of an individual shipowner choosing to
take a lower rate than the market was offering would be that he
would give an extra profit at his own expense to the merchant,
who was normally no more a deserving object of charity than
himself. The merchant would buy his goods in the cheapest
market and would sell them in the home market at the highest
price he could get. From his point of view the price he had to
pay for freight was merely an item in his expenses. It did not
affect the competitive price which the purchaser was willing to
pay and the merchant was able to get for his sales. If an individual
philanthropic shipowner cared to give him a ten-shilling freight for
which his rival was paying twenty shillings, that would have been
so much more in his own pocket. And nothing short of a complete
system of control applying at least to that particular article could
alter this situation. Government action alone could make it
either possible or useful to reduce freights below their full com-
petitive level. In these circumstances no blame whatever can attach
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FREIGHTS AND PROFITS 111
to shipovmers for taking the rates they could get. So far, of course,
as paorticular shipovmers attempted to evade the control or the
limitation of profits orthe taxation which theGovemment ultimately
imposed, or in any way impeded or opposed the Government in
taking such action, they cannot plead this excuse. But those ship-
owners who accepted their obligations and assisted the Government
in extending their control are liable to no just criticism for taking
such profits as the market afforded them. It was the Government
alone who could have taken action which would have either reduced
shipping profits or appropriated them to the Exchequer.
The Difficulties of Contbolling Fbeights
The writer feels precluded by the official position which he
occupied at the time from discussing, or expressing either his
present or past opinion, as to whether more drastic action should
have been taken at an earlier date. It is necessary, however, in
any case to take into account the considerations which did in fact
render action difficult and retard it.
In the first place the profits were obtained from the freight
on commodities bought and imported under commercial con-
ditions, not from the freights paid by the Government for their
own requirements. Throughout the first two and a half years of
the war there was a growing contrast between the Blue Book
rates paid for Grovemment cargoes, which were moderate and
constant, and the freights paid for commercial cargoes, which
were exorbitant and always rising. The Blue Book rates were
moderate in comparison with payments made in other industries
both in Great Britain and in Allied and neutral countries. They
were less remunerative than the rates paid by the French Govern-
ment, as is shown by thcf higher seUing value of French ships
during the war ; they were much less than the American Govern-
ment rates, which were necessarily fixed, as the British Govern-
ment's rates were, with some reference to prices and conditions
at the date when the system of requisition was put into force. On
the other hand the open market freights rose until they amounted
to six times the official rates.
The problem could not be solved by simply requisitioning all
ships at Blue Book rates. Supposing, for example, that the
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112 ELEMENTS IN BRITISH CONTROL
Government had requisitioned the ships employed at the moment
in importing oil-seeds at a time when oil-seeds were being bought,
carried, and sold under commercial conditions. What was the
Government to do next, after obtaining the tonnage at the
relatively low Blue Book rates ? Certainly the oil-seeds must still
be imported. They were wanted for margarine, for explosives, for
soap manufacture, and for other purposes, some of them of the
utmost importance. Were the ships to be re-chartered to the oil-
seeds merchants at the rates at which the Government had
obtained them ? The result would have been no better than if
the same action had been taken by our hypothetical philanthropist
among shipowners. The market price for the producer of oil-
seeds would have been the same and the benefit of the cheap
freight would have gone, not to the public, but to the merchant.
Were the ships then to be re-chartered at the full commercial
rates ? Then indeed the result would have been better for the
profit would have gone to the public — ^though to the public as
taxpayer, not as consumer. But with the public feeling against
high prices, it would have been extremely difficult to maintain
such a policy. It would have been denounced as profiteering,
and public and shipowner aUke would have felt they had a Inti-
mate grievance. Extension of requisitioning could thus only
secure its object of reducing costs if it were combined with the
control of the actual commodity. This was, as we have seen, the
ultimate solution ; but it was a difficult and complicated process
which was extended gradually from commodity to commodity on
many considerations, of which the cost of freight was only one.
Control of purchase, distribution, manufacture, and price of aU
the imported supplies of the country, though it gradually became
expedient on ottier grounds, could scarcely be undertaken solely
to deal with the problem of shipping profits.
Another possible method would have been to enact special
taxation, prcmding, for example, that the standard rate, beyond
which excess profits were payable, should be taken from an average
of six or ten years' profits, and not from the years of exceptionally
high freights just before the war. This method would, however,
certainly have been denounced, whether justly or not, as involving
an unfair discrimination.
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FREIGHTS AND PROFITS
113
Whether or not, under these conditions, the Government could
and should have taken earlier and more drastic action (as to which
no opinion can be expressed), it is not surprising that freights and
profits occupied a large part of public attention in the third year
of the war.
The increase in earnings and profits, as compared with normal
rates or probable rates in the years in question, if there had been
no war, was immense and possibly unique.
Pbe-wab Pbofits
Shipping, certainly tramp shipping, is not normally a very
lucrative business. An interesting, table, given in Fairplay in
December 1914, summarizes the experience of tramp steamers for
eleven years as follows :
Book value of
Profit on
Depreciation
Tear.
steamers.
voyages.
6 per cent.
£
£
£
1904
10,753,752
640,541
622,725
1905
12,353,849
762,698
740,901
1906
12,130,285
979,545
731,971
1907
13,732,764
1,079,257
832,716
1908
14,338,652
1,145,387
876,170
1909
13,915,494
647,997
837,890
1910
14,610,877
842,511
864,187
1911
15,717,739
1,471,541
943,088
1912
16.477,354
2,869,516
1,011,028
1913
16,682,965
5,505,850
1,073,665
1914
15,587,708
3,828,093
1,003,349
If we take the above figures and allow for the depreciation
there given we obtain the following net profits as a percentage of
the book values :
Profit per
Year.
of hook value.
groaaton.
Pereeni.
£ e, d.
1904
017
4
1905
017
4
1906
2-04
3 8
1907
1-79
3 3
1908
1-87
3 2
1969
loss
1910
loss
1911
3-36
5 9
1912
5-88
9 9
1913
26-50
2 1 9
1914
1810
1 7 3
1M9.88
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114 ELEMENTS IN BRITISH CONTROL
It is immediately apparent that over a long period of years
the average net profit had been less than 5 per cent.» but that in
1913 it suddenly jumped to 26^ per cent. ^Diis boom period had,
however, passed before the war, and a representative tramp ship-
owner in December 1913 stated the general view of the prospects
in the following words : ' We are in for a very bad depression.
The fall in rates in the latter part of this year, 1913, is altogether
imprecedented. No good will come from attempting to conceal
that the actual conditions now prevailing are a very serious
position to face.'
We start generally with the fact, therefore, that shipping,
normally not accustomed to big profits, had had a boom year in
1913, and was about to face' a period of serious depression likely
to last for some years.
Wab Profits
Let us contrast with this the actual profits. These can best
perhaps be illustrated by stating what with ordinary good fortune
would have been the normal experience of a shipping company
owning in 1914 5 average ocean-going tramps of 6,000 tons
dead weight. In the calculations a normal share of requisitioning
by the Government is allowed for, and the shipowner is assumed
to pursue the safe but not the most remunerative policy of time-
chartering for periods of six to nine months. On this basis the
capital of the company at the conmiencement of the year would
have been £180,000. The gross earnings of the company from
August 1914 to the end of September 1916 would have been
£562,881. The expenditure, including insurance on the increased
values of the ships by appreciation, would have been £205,944,
leaving a net profit of £356,937, or 92 per cent, per annum. For
the first nine months of 1916 the net profit would have been at
the rate of 150 per cent. The company could then have sold out
at the price of £700,000, realizing a further profit of £620,000, or
a total of £876,937 net profit, that is, 225 per cent, per annum.
Of these sums the company would by that date have paid £155,224
in excess profits duty, and about £37,383 in income tax on the
current earnings. They would have paid no taxes upon the
£520,000 profit due to appreciated value. If the company did not
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FREIGHTS AND PROFITS 116
sell out, Idad if we deduct both excess profits and income tax, it
would still have made a net profit of 4& per cent, (or 70 per cent,
per annum for 1916) in addition to having at the end a property
(which could be alternately treated as something to be sold tor
cash or a capitalization of prospective earnings) about four times
the vahie of what they started with. This is a short summary of
the calculations giv^i at greater length on pp. 351-2. Not only,
however, was the rate of profit very high, but the total sums
involved were very great. Probably in the first twenty-six months
of the war the total net profit of British shipping amounted to at
least £262,000,000, with an appreciation in value from£175,000,000
to about £600,000,000.
Aggravating Factobs
It must first be remembered that these increased profits were
obviously due to war conditions, and were indeed the direct con-
sequence of demands made on shipping by the transport of war
supplies. Secondly the expense of making shipping possible under
war conditions (defence by the Navy) fell on the public without
any special levy on freights to meet it. In the thhrd place, ship-
owners had had their boom years immediately before the war,
and would have suffered a corresponding depression in 1914-15,
if there had been no war. In the fourth place, while the Govern-
ment controlled the employment of sea transport almost as
completely as land transport, the former alone were allowed
to multiply freights and earnings ten-fold; the latter were
from the first day of the war restricted to peace standards. In
the fifth place, owing to the provision of the Excess Profits Duty
Act, which derived its standard from two out of the three years
preceding the war, and to the accident that 1913 was a boom year
for shipping, the shipowner made four times his average profit,
and at least four times what he would have made, if there had been
no war, before he began to pay any excess profits duty at all.
In addition, and perhaps most important of aU as an explanation
of the public interest in the question and its influence in com*
pelling organization, is the fact that shipping is a key industry
on which the whole economic life of the country is dependent.
The results of high freight, by increasing the cost of imported
12
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116 ELEMENTS IN BRITISH CONTROL
articles (though to a less extent than was commonly imagined),
permeated the whole industrial and domestic life of tiie nation*
It is not to be wondered at, therefore, that the Grovemment
decided early in 1917 that profits must be reduced by the exten-
sion of requisition at Blue Book rates. Fortunately, by this time,
nearly all imported articles were themselves being brought under
control, and transport therefore was being arranged for them in
requisitioned tonnage. The difficulties of carrying commercial
cai^ in requisitioned vessels, which are described above, were not
in practice, therefore, very serious. The decision to make requisition
universal did little more than expedite a process of extension
which was already almost complete.
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CHAPTER IV
THE STRUGGLE AT SEA
The rdaticm between naval and civilian action. The ineffectiveness of the
early submaxine. Extension of range from British waters to the Mediterranean.
Defensive Armament. The civilian air-raid agitation and its effect on the
defence of Merchant Vessels, bazzle-painting. * Protected Approach Areas.'
Hie Intensive Submarine Campaign. Its immediate success. The Convoy
System. Arguments for and against. Its Organization. Outward and Home-
ward Convoys. Its decisive success. Courage, skill, and endurance of the Naval
protectiDg forces and the Merchant Marine. The defeat of the Submarine.
It is not within the scope of this book to give the history of
the submarine campaign. We are concerned with the civilian
struggle fought with the weapons of administrative orders,
statistics, and ration cards. Others must tell the more dramatic
tale of the contest at sea ; of the submarine itself, and its varied
foes ; the destroyer, the minefield, the patrolling craft, the decoy
ships, the aeroplanes, the torpedo, the gun, the bomb, the depth-
charge, and the heroism and endurance of the sailors, civilian and
naval, on both sides.
But something must be told here, though it is only in the
briefest outline, and though it includes only what is already of
public knowledge and omits all mention of the many inventions
of great technical interest. The civilian problem cannot be seen
in its proper perspective without some picture in the mind of
the naval contest, whose varying fortunes determined its conditions
and its character. Above aU, some reference must be made to the
development of the convoy system, the crucial factor in the
Allies' success.
The naval and civilian measures, for the most part separate,
touched at several points. The civilian authority found ships
from the mercantile marine to act as armed cruisers, as patrolling
vessels, as decoy ships. The civilian intelligence system was
used to facilitate the arrangements for arming and dazde-painting
merchant ships. And in the convoy arrangements the closest
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118 ELEMENTS IN BRITISH CONTROL
co-operation was necessary throughout, the ships being grouped
as far as practicable according to speed and assembled at the
appropriate ports by the civilian department in conformity with
the naval requirements.
The SuBifABiNE of 1914
Neither of the combatants realized before the war the possi-
bilities of the submarine. It was fortunate indeed f <Nr the Allies
that the submarine of 1917 was not launched upon them when
their counter preparations were at the 1914 stage. The submarine
of the first year of the war was a fragile, timid, and precarious
craft. It had a short range of action and had to return frequently
to its base port. It required to operate in shallow waters, where
it could rest on sandy shores, not so deep as to make the water
pressure excessive. It was, therefore, confined mainly to the
coastal waters of the United Kingdom. The eariiest counter-
measures were addressed to these vulnerable conditions. They
succeeded in making the submarine life unbearably nerve-racking.
For a time indeed the raider and the mine seemed more dangerous
than the submarine's torpedo.
Submarine. Mine. Bmder.
Avgnst-Deoember 1914, vessels sunk • 3 42 55
But as counter measures were becoming effective in the near
seas, the submarine was becoming capable of more distant work.
In the first twelve months of the war, of the submarine victims
60 per cent, were sunk within a short distance of the United
Kingdom. In the next year this percentage fell to 22.
By 1916 the submarine was able and was forced to extend
and largely transfer its activities to the Mediterranean. Here
its supplies were more precarious, but it still had the advantages
of shallow waters, near shore retreats, and a concentration of
merchant ships which made it easy to find its prey.
Longer absence from base ports, however, made it necessary
for the submarine to rdy more upon gun fire (which meant coming
to the surface) than upon its^quickly exhausted supply of torpedoes.
The answer, and for a time the sufficient answer, to this was the
defensive armament of merchantmen, the supply of guns and
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THE STRUGGLE AT SEA 119
gunners. In 1916 the submarine was still very vulnerable and
timid upon the surface. The possession of a gun was almost
a complete protection. In at least one instance, indeed, a master
who possessed no gun saved his ship by firing a rocket which the
timid submarine mistook for gun fire.
Unhappily it was difficult to produce the required guns quickly
enough. And at this crisis the situation was embarrassed by an
agitation on the part of civiUan non-combatants (which found
striking electoral expression) for further protection against air-
craft. The agitation reached such dimensions that the Govern-
ment imnounced in February 1916 Hhat the construction of
anti-aircraft guns has now priority over other ordnance, and as
fast as these guns are produced by the Ministry of Munitions they
will be distributed to the best advantage throughout the country \
While a single gun would ensure the safety of a merchant ship,
hundreds were sent not only to districts which had been attacked,
but to provincial centres of population which conceivably might be
attacked. Meantime, the British sailor was asked (and was never
refusing) to go in 7 or 8-knot tramp steamers, flogging their way
slowly through the infested waters of the Mediterranean, without
protCMction of any kind. One ship in ten that passed the Straits
of Gibraltar at this period never returned. One gun per ship
would have made them safe ; but the guns were being scattered
over England to defend a civilian population of whom only about
a thousand were killed, out of a population (in defended towns)
of some 20,000,000, in four years of war.
The success of defensive armament in 1916, and the fear of
decoy and ' mystery ' ships, forced the submarine back to the more
frequent use of the torpedo. Against this the gun on the merchant
ship was useless and two new methods of protection were devised.
Merchant ships were camouflaged by dazzle-painting, i. e. they
were painted to reduce their visibility or deceive the submarine
as to their pace and direction. Opinions differ as to the success
of this device, and such statistical results as are available are not
decisive. It certainly did reduce the risk to some extent, and that
it made observation more difficult was testified by our own
submarine officers. But its success was limited, and on the whole
tended to diminish.
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120 ELEMENTS IN BRITISH CONTROL
Peotected Afpboach Abeas
The second method was the arrangement of a number of
^ protected approach areas ' through the dangerous waters near
the United Kingdom. Forces of trawlers and sloops, with some
destroyers, would be assembled in certain areas of which the
most important was off the south of Ireland. Each of these
areas was in the form of a cone ; the merchant vessels received
secret orders as to where to enter it along a wide base line, which
was changed from time to time, and on entering it they received
such protection as the patrolling craft could afford. Special
escort was also provided for particularly valuable ships at an
assigned rendezvous.
This system was ineffective from the beginning, and in time
proved a positive death trap. The approach areas covered an
immense expanse and the protective craft were utterly insufficient
to defend it. The areas and the places of rendezvous became
known. Sometimes perhaps an indiscreet master would talk
at his loading port. Sometimes the rendezvous would be missed —
through bad weather or other causes — ^the ship would wireless
in the mercantile code, which was learned by the enemy, and
a submarine instead of a protecting escort would answer her calL
Probably, too, the sight of a protecting craft informed the sub-
marines where shipping was likely to be found. In the end, the
protected areas became more dangerous than the open seas, and
perhaps a master who took his OYm route without protection had
the best chance of escape. The chart which showed the sinkings
in the area off the south of Ireland became a tragic sight. The
protecting craft rescued most of the crews; but they could not
save the ships.
This was the main method of attempted protection before and
during the opening of the intensive campaign in the early part
of 1917. The success of defensive armament, as we have seen,
drove the submarine from the use of the gun to the use of the
torpedo. By this time it was much better able to employ this
more expensive weapon. It was no longer the Httle fragile craft
of 1914, capable of carrying few torpedoes and scanty stores and
confined to near and shallow seas. It was now as big and aa
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THE STRUGGLE AT SEA 121
strong as a small merchant ship, and had a range of action of some
thousands of miles; was able to stay at sea for weeks and to
carry large stores of provisions and torpedoes. But it was
threatened by destroyers and defensive craft of every description^
and by aeroplanes and airships, and therefore found observation
from ihe surface difficult. More and more it had to rely upon the
periscope, and it is not easy to distinguish ships of one nationality
from another through ^ periscope, especially when no ship is
anxious to advertise the' fact that she is a destined and legitimate
prey. Moreover, large numbers of neutral ships were by this time
in Allied service. The merchant ships of the world were becoming
one fleet.
The Intensive Submaeine Campaign
The ^lemy came to the conclusion, therefore, that if the
submarine was to achieve a decisive issue it must be free to
attack neutral and Allied ships indiscriminately. Further than
that, it must be free to sink without notice ; torpedo firing from
periscope observation made it even more impossible to give
notice than to distinguish nationaUty. To sink, and to sink
without warning, vessels of all nationalities meant the danger
of war with America. But the German Admiralty promis^ that
with liberty of action they would reduce Great Britain in six
months — ^long before America's aid, even if she decided to fight,
could be effective. This promise, though on any probable assump-
tion rather too optimistic, was no idle one. It was based, and not
unreasonably, on a careful calculation of Allied needs and resources.
It proved fallacious through two new coimter measures still to
be devised — ^the convoy system and the complete controlof shipping
and supplies by the Allies. At the time it was a gamble perhaps —
but not a wild one. The German Government hesitated between
conflicting advisers, as the revelations in Admiral vpn Tirpitz's
book have shown, but at last took the fatal decision. In December
1916 it was announced that certain areas, including all the waters
round the British Isles, were ' war zones ' and that any vessel
found in those waters, whether Allied or neutral^ was liable to be
sunk without notice after February 1, 1917.
The opening success of the new campaign was sta^ering.
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122 EI^MENTS IN BRITISH CONTROL
In the first three months 470 ocean-going ships (including all
classes of ships the total was 1,000) had been sunk. In a sin^
fortnight in April 122 ocean-going vessels were lost. The rate of
the British loss in ocean-going tonnage during this fortnight was
equivalent to an average round voyage loss of 25 per cent. —
one out of every four ships leaving the United Kingdom fw an
overseas voyage was being lost before its return. The continuance
of this rate of loss would have brought disaster upon all the Allied
campaigns, and might well have involved an unconditional
surrender.
The Convoy System
But the black fortnight of April was perhaps a blessing in
disguise. The certainty of AUied disaster under the existing
conditions was so obvious that those who had advocated the
institution of convoys were at last given their chance.
The convoy system consisted briefly in assembling merchant
ships in groups of up to forty ^ near their loading ports, in bringing
them across the high seas under the protection of a cruiser and
then escorting them through the submarine zone by a number
of destroyers, sloops, and trawlers. The protecting craft no longer
patrolled a large approach area. They kept with the convoy and
escorted it home.
The system had been frequently discussed, and fortunately
worked out in detail by those who believed in it, but had hitherto
been rejected. Cruisers had, of course, protected transports
against the risks of raiders; but the protection of the tramp
shipping of the world against the submarine was a very different
problem. It was urged that the task of assembling ships of all
nationalities and all speeds at ports of departure would be one
of great diflficulty, and that the delays involved would reduce
the importing capacity of the ships ; that the speed of a convoy
would be limited to the speed of the slowest ship in it; that
masters would find it difficult to ' keep station ', i. e. maintain
their proper position in the general formation of the convoy, in
Atlantic fogs and storms ; and, finally, that a convoy system
would merely assemble its prey for the submarine and offer it
a larger target.
* The more usual number was 20-25.
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THE STRUGGLE AT SEA 123
These reasonable, though insufficient, objections were strength-
ened by others for which there was less foundation. The country
now paid a heavy penalty for the method it had adopted in
publishing its weekly losses. Week by week the losses of ocean-
going ships, averagmg say 40 British, or 50 British, Allied and
neutral together at this period, were published in conjunction
with figures of arrivals and departures at British ports (about
2,500 of each in every week). The figures were, of course, exact
in both cases; but those of the arrivals and departures gave
a seriously wrong impression, not only to the pubUc but to many
of those concerned in naval defence.
It is true that there were 2,500 arrivals — ^but about 2,360 of
them were cross-Channel ships, vessels shifting ports or small
coastal vessels merely arriving from another coastal port and
never seriously at risk. The arrivals of British ocean-going ships,
comparable to the forty lost, were not 2,500 but about 140.
Every one in an official position knew of course that there were
not 2,500 ocean-going ships arriving each week, but only a very
few in control of merchant, not naval, ships realized that the real
number was anything like as small as 140. This wrong impression
had two bad resists. It disguised, until April 1917, the real rate
of loss. Not many men realized that for some time past the
average life of a ship had been only ten round voyages. It also
exaggerated the magnitude of the administrative task involved
in a convoy system. The escort of thousands of vessels a week
would have been an impossible effort — ^twenty arrivals a day
was a manageable problem.
The Ministry of Shipping had throughout warmly supported
the proposals of the naval officers who advocated convoys, and
it had at its disposal a shipping intelligence system which both
accurately measured the task and assisted in its execution. The
Ministry offered to carry through the whole organization of
merchant ships — ^their grouping as to speed, the arrangements to
collect them at loading ports and to disperse them on arrival, &c.
The dose association in this work of the naval officer, to whose
energy, initiative, and ability the adoption of convoy was chiefly
due, with a shipowner — ^who had volunteered his services to
Requisitioning Branch and had there handled shipping and ship-
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124 ELEMENTS IN BRITISH CONTROL
ping problems under war conditions — ^proved an exceptionally
fortunate combination ; and littie as it was known to the public,
their work proved of capital importance in the conduct of the war.
The arguments which were opposed to the objections stated
above were based upon a much truer appreciation of the position. ^
The difficulties of assembling and of providing escort were proved
to be manageable by showing the number of ships concerned,
— an average of only some twenty arrivals a day in the
United Eongdom. The skill of the merchant skipper accustomed
to manage his vessel under the most varied conditions was justiy
estimated to be sufficient to enable him to keep station. It was
pointed out that if a convoy were properly guarded a submarine
would have no time for more than one ' browning ' shot, which
might or might not hit ; and would herself be exposed to instant
attack, whereas, out of a similar number of vessels coming independ-
entiy along the track, she would probably sink two or three or
more without risk to herself. It was also contended that the loss
of time involved in collecting the vessels and reducing all to the
speed of the slowest in the convoy would be largely compensated
by the fact that more direct routes could be taken.
Many incidental advantages were also justiy claimed for the
system. The morale of masters and men had never failed, but
it was being tried hard in the early months of the new campaign.
The new system gave a sense of security. It relieved the masters
of the task of coping with the submarine and left them to their
proper work of navigation. If a ship was hit, rescue was assured.
A convoy could be rapidly diverted from the region in which any
submarine had been discovered to be operating. Secrecy could
be much better preserved, for only the escorting cruiser and the
Admiralty need know the route and destination. The danger
of a raider, which at one period had been serious, was countered
incidentally. For all but the southern' seas were empty of all
prey except the convoys, and to have attacked a convoy would
have meant attacking the cruisers, which it was the first object
of a raider to avoid.
It was not until after the disastrous losses of April, however,
that the system was given its chance. ^ Controlled sailings ' in
the French coal trade had shown good results, but it was ooly
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THE STRUGGLE AT SEA 125
on May 10 that the first long-distance convoy started from the
Meditmanean. It arrived without loss, and thereafter amid
constant difficulties the system was extended till it covered
practically all vessels on every dangerous route. The success
of the new convoy system in protection was as striking as that
of the new submarine campaign in its opening attack, and its
success continued to the end. Before its institution, and over a long
period, ships had been lost at the rate of one in ten voyages ; in
the black fortnight of April, one in four. But out of 149 wheat
and sugar ships sailing in convoy from Newport News between
July 2 and October 10, 1917, only two were sunk, and these were
botli vessels which had failed to keep in the convoy.
During the following months iiie organization was built up
and the system extended. A committee was appointed to work
out the arrang^nents in detail. Lectures were arranged to
instruct the masters in exactly what was required of them.
Signal ratings and special gear were suppUed to the ships. The
Shipping Intelligence Section was extended by the development
of a new section of the card index, in which ships were arranged
in groups of ports and routes, so that it was possible to state on
any given day the numbers and names of all ships in port or
on passage on any given trade routes. Information as to speeds
was verified and corrected, so that the organization of convoys
of different speeds could proceed.
The arrangements were based upon four main divisions of
the world: (1) the Mediterranean, including Morocco and south
Spanish ports, the convoys starting from Gibraltar; (2) the
South Allantic, including South America and vessels homeward
bound from West Africa and the Cape, the convoys starting frcmi
Dakar or Sierra Leone ; (3) the Gulf of Mexico, ships from the
Panama Canal and vesseb loading in the United States not north
of Baltimore ; and (4) vessels loading in Canada and the United
States north of Baltimore, for which the assembly ports were
Hampton Boads, New York, Halifax or Sydney, Cape Breton.
llie convoys working in these four areas included not only
British and Allied vesseb but neutral vesseb as welL The British
authorities thus accepted responsibilily for the central organiza*
tion of the protection of all ocean-going vesseb in the submarine
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126 ELEMENTS IN BRITISH CONTROL
area. Contributions in protecting craft were, however, ffLvesi by
the Allied navies. The French, Italian, and Japanese, and in
particular the American Navy, which now joined its forces with
the AUies, provided assistance of the greatest value.
After a month's experience the success of the convoy arrange-
ments for homeward bound traffic had the effect of increasing the
danger to outward bound vessels. At first the danger to home-
ward bound vessels had been considerably greater, because
they convei^ed and were more easily found, because they were
not in possession of the latest submarine inf ormati<Hi and because
they were loaded and therefore more valuable than outwaid
vessels which were often in ballast. In April, for example, the
risk attaching to the homeward bound vessd was more than twice
as heavy as that of the outward bound one, but by August the
proportion was reversed. Outward convoys were therefore
organized. The arrangements were somewhat different and in
some respects more difficult, and the nicest synchronization was
required in order to use the same escorts first to escort outward
and thai to meet a homeward convoy. Outward convoys, in
spite of an inauspicious beginning, were soon as successful as the
homeward ones. By the end of October about 100 homeward
convoys had been brought in with 1,500 steamers, and a dead
weight capacity of 10,500,000 tons. Of these only ten vesseb
had been torpedoed while in contact with the ccmvoy (0-66 percent)
and a further fourteen after being separated from the convoy,
making a gross total of 1*6 per cent. By the same date, 77
outward convoys, including about a thousand ships and 7,000,000
tons dead weight had sustained a loss of only 0*57 per cent. One
interesting result was that, as ships were more difficult to find
at sea, the submarine was driven closer inland. B^ore convoys
were in full operation nearly 60 per cent, of the ships sunk were
in the open sea ; but afterwards the proportion of vessels sunk
there became insignificant, only six British being lost in the opad
sea in the four last months of 1917. Not only, ther^we, did
convoys enormously reduce the number of vessels lost, fhey
greatly reduced the risk to life when a vessel was lost. The crew
of a vessel sunk ten or twenty miles from land was usually rescued
almost at once. This was a very different ordeal frmn that which
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THE STRUGGLE AT SEA 127
crews of ships sunk two or three hundred miles from land had
to face in the early part of 1917, when a great proportion, even of
those who managed to get into their boats, died from exposure
before they reached land or were picked up.
Throughout the greater part of ^^17 the main effort was
directed to extending the system with the greatest possible rapidity
so as to cover ships of dl nationaUties on all routes. Even a
hastily organized convoy under escort was infinitely more
valuable than the old protective system, and delays due to
defects of details in the arrangements were of little importance
in comparison with the security afforded.
Once the extension was complete, however, steps were taken
to perfect the organization so as to prevent all avoidable delay
and expedite the speed of the sailings.
The first step was to differentiate convoys according to the
speed of the protected vessels, special convoys being formed for
the faster vessels. Improvements were then effected by a detftiled
examination of the conditions under which vessels were loaded
and bunkered. Elaborate arrangements were also required to
secure that in loading the vessels account was taken of the
destination of the cargo and of the next convoy respectively.
Great delay and trouble would clearly be caused if a vessel were
loaded largely with cargo for the east coast and the next convoy
sailing was for the west coast of Great Britain. Special officers
were sent to America as port convoy officers to deal with these
difficulties. Simultaneously arrangements were made in the home
ports, particularly at Liverpool, to secure the pooling of bunkering
arrangements and berths, so that an owner who was not using
his own private berth should not leave it idle while another owner's
vessel was waiting for a berth.
It is impossible here, however, to describe in detail the history
of the convoy system, the many problems it had to face, and the
modifications in its organization. It is sufficient to say that it
met successfully every new strain placed upon it. The threatened
and much feared attack upon the vessels transporting the
Argentine wheat crop purchased in January 1918, the even more
crucial danger to the transports bringing American troops at the
crisis of the war, were both averted. The system was a triumphant
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128 ELEMENTS IN BRITISH CONTROL
success and may perhaps justly claim to be the decisive factor in
the long contested struggle between the two blockades. The
shipping losses fell steadily throughout the latter part of 1917
and beginning of 1918, and with the complete extension of the
convoy system they had almost ceased to be serious. This reduc-
tion was not due, as was popularly imagined at the time, to the
destruction of submarines ; on the contrary, the number of sub-
marines at sea was continually growing and the skill and strength
of the individual submarine increasing. We have seen that the
worst losses of the war were in April 1917, and that the con-
tinuance of the rate of loss at that time would have been fatal
to the Allied cause ; but there was not a single month after April
when the German Admiralty did not have more submarines
operating than in that month, and in some months indeed they
had 50 per cent. more. That they failed to continue their success
w^is due not to failing numbers or failing skill but to the convoy
system. By the Armistice 607 homeward bound convoys had
been brought in, including 9,300 ships of a tonnage of 68,000,000
tons dead weight ; of these only 78, with a dead weight of 500,000
tons, had been lost. By the same date there had been 527
outward convoys with 7,300 ships of 52,000,000 tons dead weighty
of which only 45 ships, of a dead weight tonnage of 387,000 tons,
had been lost. This gives a total loss of 118 ships (890,000 tons
dead weight) out of 16,600 ships (120,000,000 tons dead weight),
or 0*7 per cent. These figures do not include losses of vessels
sunk when not in contact with the c<Hivoy. If these losses, as
well as those due to marine risk, are also included, the total is
still below 1 per cent, as compared with about 10 per cent, before
the system was adopted.
The Navy and the Mercantile Mabine
Others must tell of the personal aspect of the struggle at sea,
of the heroism and endurance of the thousands of men engaged
in all the craft, the trawlers, motor boats, patrol vessels, and
destroyers employed in protecting the merchant fleet or in attach-
ing the submarines. Something has been told in the brief notices
issued with the V.C.'s given for decoy vessel work ; a little more
in various books and records, in casual tales and anecdotes, but
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THE STRUGGLE AT SEA 129
the full tale remains to be told. I remember coming back from
America on a big Atlantic liner in August 1917. When we were
still two days from the nearest land the captain told me that the
escorting destroyers were due in twenty minutes. ' But I doubt
whether they can be there — ^it is dirty weather for destroyers.'
I left the deck for twenty-five minutes. When I came back the
four destroyers were there on right and left, before and behind,
almost invisible with each new wave — ^but exact to the minute in
their station. And so they continued for two days and nights till
we entered the nearer waters when mines became more dangerous
than submarines ; and then they went line ahead to take any
mine there might be and so, at the cost of their own destruction^
save the ship they were protecting. This was the most ordinary
example of the current day's work, but it enabled one to pictiu'e
something of the courage, the dangers, and the hardship of those
in the small and fragile craft in the frosts and seas of winter.
No less was the courage of the merchant seamen, of whom
15,000 lost their lives. Amid the innumerable difficulties that
beset the shipping problem of the Allies they were throughout
happily free from anxiety as to the conduct of the officers and
seamen of the mercantile marine. No calculation in any shipping
and supply programme included a margin for the human factor.
Even when vessels unarmed and without wireless were required
to proceed unescorted to waters infested with submarines, crews
were €dways available and willing to sail. The enemy attempted
two objects in adopting the more ruthless form of submarine
warfare, the first to increase the destruction of the vessels and
the second to break the morale of the men who manned them. In
the first they achieved a dangerous though temporary success.
In the second they failed from the beginning and throughout.
Two incidents from hundreds may be mentioned in illustration.
In 1917 a large cargo liner was torpedoed some hundred miles off
the Irish coast on a bitter winter night when the seas were high^
Of the crew of sixty, twenty-six were killed by an explosion or
drowned in getting to the boats or died from exposure. The rest
got away, some of them, including a cabin boy of seventeen, with
nothing but the shirts they slept in, and reached England safely.
All without a single exception, and including the cabin boy, went
1569.33 -a:
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130 ELEMENTS IN BRITISH CONTROL
straight to the owner's office and asked to be put on the next
ship. In another instance, a neutral crew of a neutral ship who
had less inducement to face the risks of a war not their own were
disinclined to put to sea. The master, who had married an English
wife and had his home in England, went home dejected and told
his wife his men would not sail. She asked him to let her come
and talk to them. He consented, not knowing what she intended
to say. She saw the crew and said simply ' You may be interested
to know that I am going to sea with my husband this voyage \
She went to sea — ^and so did they.
Courage and skill combined made the convoy system the
crucial factor in the long struggle. /
The long contest between attack and defence was at last
decided, and it was decided conclusively before the war ended
and on its own merits, not as an incidental result of the military
successes of the Allies. In the first quarter of 1918, 1,150,000 tons
were lost from both war and m€uine risks, 870,000 tons were
built (loss, 280,000 tons). In the second quarter of 1918, 962,000
tons were lost and 1,245,000 tons built (gain 283,000 tons). In
the third quarter 916,000 tons were lost, 1,884,000 tons were built
(gain, 468,000 tons). In September the world gained even without
the building in America. In October, apart from a few casual
sinkings in the early dates, the losses ceased. Apparently the
subm€uines had been recalled — either in anticipation of the
Armistice or to help the Grand Fleet in one last desperate gamble.
The next time they left port was when they were surrendered to
the Allies among the first spoils of victory.
So triumphantly and decisively the long struggle was ended.
It may be that the submarine had other terrors in store, but apart
from some new development of which they had no experience
the Allies had the certainty that, difficult as would have been
their experience during the winter of 1918-19, increased building
would make them safe from the spring of 1918 onwards.
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BRITISH LOSSES, AUG.I9I4 TO OCT. I9I8
loooCLT.
Auj-Ito^H
1915
IQ16
1917
Jan.-Ocr.191S
1000 G.T.
5ao
500
480
460
440
420
400
380
340
310
300
280
260
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220
200
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to
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1913
igi6
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JanrOct. igu
loooQX
*Loss^ by German rakkrs and cruisers
-losses In/ submarines
-losses by Brines
-Marinelosses
The abow table shows Ae devdcpmeot of losses u
tbe piKise loss in a 9twn month .
ft- Witt be noted Aal-:-
a)in ufi^bises by cruiser and raider were serious; losses by submarine were negligiHe
ei)a6ri9i4 alnu^ all losses, except tbose by subnonne, were ne^^
(3) the success of die intensive submarine campaign (Sprmg 1917) was immediate and overwlielmin^
(4)the success of the convey system (beginmng about my 1917) was equally ImmdialE and comftete'
(5) tte 'marine losses* (i.ctosesl^ ordinary sea risk, coUisicms etc) show an increase as a result of war
conditions (n^ation without li9hts etc) and afiirther slight increase afer the institution of convoy
(collisions). The seasonal variations between summer and winter are also shown.
K2
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PART IV
ALLIED CONTROL
CHAPTER I
ALUED ARRANGEMENTS IN THE FIRST THREE
YEARS
The Commission Intemationale de Ravitaillement. The two principles.
Ckmmiunication through Foreign Office. Direct contact. Emergency assistance.
Variety of method. Assistance on the basis of a fixed quantity (Shipping Contnd
Committee). The Agreement of December 8, 1916, The Inter-AUied Shipping
C<unmittee — Causes of fafliue. Control in Allied Countries :, France, Italy,
America.
During the early part of fhe war shipping had very little to
do with the development of Allied organization. The Allies
wanted many things from each other more than ships. They
wanted uniforms, guns, shells, and equipment of every kind whidi
British factories could make. And above all they wanted money.
For money could buy all these things and, at this time most easily
of all, could secure the use of ships to carry them.
The Commission Internationale de Ravitaillement
These requirements at once needed a new organization. It
would have meant confusion and waste of every kind if the French
and other Allied War Offices had continued to place their private
orders with British manufacturers in competition both with each
other and with the British departments. To prevent this the Com-
mission de Ravitaillement (the C.I.R.) was established in London in
August 1914. It included representatives of the Allied purchasing
departments ; it received their demands and distributed th^n
with due consideration of similar British orders among British
manufacturers. It served a very useful purpose in saving the
AUies from being exploited or misled, in hmiting the increase of
prices by competition, and to some extent in pooling the know-
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ARRANGEMENTS IN THE FIRST THREE YEARS 135
ledge of the different countries, and saving each of them from
buying its experience separately and dearly by its own misfortunes.
It was indeed essentiaJly a British organization to help Allied
purchasers. It was formed to co-ordinate purchases in Great
Britain : it was under British management and it derived its
strength and effectiveness largely from the fact that the purchases
had to be made with British credits.
At the same time the C.I.R. marked an important development
in the medutnism of Allied co-operation. Li peace time, if the
French Ministry of Commerce wanted something from the British
Board of Trade it would transmit its request through the British
Embassy in Paris, or the French Elmbassy in London, to the
British Foreign Office, who would in turn send it on to the British
Board of Trade ; and the reply would return by the same
rather devious channel. The communications of two specialized
departments on any technical matter thus passed four times
through the hands and pens of non-specialists. This procedure
was clearly not suited to the intricate and urgent arrange-
ments which the war required between the Allies. It was
based, like Foreign Offices themselves, upon the principle,
natural perhaps for most n^otiations before the war, that
when something has to be arranged by the administrations of
two countries, the first thing to consider is that two separate
countries with all their complexity of interests, some divergent
and some coincident, are concerned, and the second only the
technical character of the particular affair in question. Under
the stress of the war, as later chapters will describe, this position
was reversed. The intricacy of the arrangements compelled direct
contact between the spedalized Ministers and officials of the
several countries. The common interest in a common cause made
it less reasonable and less possible to make arrangements about
food or about munitions or about ships mere items in general
negotiations between Great Britain, fVance, and Italy.
Little by little, as we shall see, the principle on which Allied
action devdoped during the war was that a French official wantii^
British ships was primarily a person wanting ships from some one
who could supply them, and not primarily a Frenchman n^otia-
ting with an Ei^lishman. The process was never complete and
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136 ALLIED CONTROL
differences of national interests always remained. But they
continued to become less important and (here is the real point)
they were ultimately argued out and settled by specialists of the
different countries.
This, however, is to anticipate. The principle on which the
C.LR. was founded in 1914 was essentially that on which n^otia*
tions between different countries proceeded before the war. The
change was designed to make that principle consistent with
comparatively expeditious business and not to alter the principle
itself. The transference to an Allied basis was gradual and
developed from the necessities of daily business. As the Allied
representatives, attached to this Conunission, proceeded with
their work it became difficult to interpose a central unspecialized
person between them and the corresponding specialist in the
British supply departments. Personal relations between these
specialists grew and direct contact developed. This was for some
time, however, in the case of shipping confined to occasional
visits with r^ard to the detail of transport arrangements.
EiiEBGENCY Assistance
In general, from 1914 to the end of 1917 each country made
its own arrangements for transport, partly by requisitioning its
national tonnage and partly by chartering either national or
neutral tonnage in the open market.
From the beginning, however, this general system was supple-
mented by varying forms of assistance from the strongest shipping
power — Great Britain. In the first place, a certain amount of
tonnage, on no definite plan and on no logical principle, was
allotted to France and Italy at Blue Book rates for the conveyance
of certain war materials. In the second place, the British requi-
sitioning authority gave exemption from requisition to a consider-
able number of British vessels which had been ^ time-chartered '
to the French Government or French companies. Both these
measures were inadequate and difficult to apply. Under the first,
certain tonnage within a limit never exactly defined was allotted
to France at Blue Book rates for the conveyance of oats and steel ;
but at the same time other oats and other steel purchased for the
French Government for similar purposes and under similar con-
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ARRANGEMENTS IN THE FIRST THREE YEARS 187
ditions were being conveyed in freight chartered at several times
the cost. This anomaly was obviously undesirable and assistance
by this method had, moreover, all the disadvantages of a concealed
subsidy. The second system of exempting British ships chartered
for French munitions service was open to even more serious
objections. It gave an inducement to British owners to attempt
this method of evading their proper liability to requisition. In
addition, while it was possible to ascertain that a particular vessel
so favoured was conveying military supplies, it was never possible
to be sure that the effect of giving this exemption was not to
enable the release of another vessel belonging to the Allied com-
pany to engage in profitable commercial trade of no military
importance. Whether or not this was true in any particular case,
the fact that British shipowners believed it, and that it could not
be disproved, greatly added to the difficulties of the British
Grovemment in dealing with them.
In 1915 and 1916, therefore, British shipping assistance to the
Allies was rather improvised than organized. During this period
there were normally some 600 ocean-going British ships in the
service of France and Italy, in addition to some 250,000 tons
of small coastal vessels in the French coal trade. Some of
these vessels were on requisition at Blue Book rates ; others were
chartered on time or voyage at specially restricted rates ; others
were chartered under compulsion of the Carriage of Foodstuffs
Committee at rates which varied with the action of that committee ;
others were chartered freely in the open market either on voyage
or on time. Some of the latter were given exemption from requisi-
tion and accepted lower rates to obtain that privilege ; others
were chartered with no such exemption.
Sometimes an emergency in the coal situation or a sudden
shortage in some class of military supplies would bring a mission
from the French Cabinet or military head-quarters, and extra
assistance would be given or refused on such judgment as could
be formed at the moment of the relative urgency of French and
British needs. Normally, and in the current course of the day's
work, French and Italian representatives on the C.I.R. in London
would be negotiating with ilie Transport Department for tonnage
for one requirement or another ; asldng for pressure to be put on
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138 ALLIED CONTROI^
an owner to accept a charter, or exemption from requisition to
be given to one already chartered.
But during this period French and Italian supplies were not
fully surveyed and known even by their own Governments (as
indeed British were not). Still less was there any oi^anizati^m
by which they could be measured against each otiier or against
British requirements. And such British tonnage as was in French
service was there on a precarious tenure ; a large part of it was
always liable to be requisitioned away und^ some new pressure
of British needs.
- From time to time, indeed, attempts were made to place the
tonnage arrangements on a somewhat more stable basis. In May
1916 for instance, the Cabinet decided, on the recommendation
of the Shipping Control Committee, to limit the British tonnage
in French and Italian service to the amount in that service on
April 1, and not to replace future war-losses. It was hoped
that both the Allied and British Governments would then be able
to frame their supply programmes responsibly on the basis of
definite knowledge of the amount of tonnage available for them.
But the decision was based upon no information (for none existed)
as to the relative supply needs of the different coimtries. And
in time the pressure of circumstances made it impossible to main-
tain it.
Agbeement of Decembeb 3, 1916
In December of the same year again, an important though not
a comprehensive shipping agreement was concluded between the
French and British Governments, under which the latter under-
took to maintain a certain amount of tonnage in the coal and other
specified services.
This agreement reflects very accurately the conditions under
which shipping arrangements were made between the Allies at
this period.
In the first place it gives clear evidence of its immediate origin.
Emergency assistance was required by France in a number of
different services suffering from lack of shipping. Special pro-
visions are inserted as to the transport of rice and of coolie
labourers from Indo-China, of coal and steel from England ; as
to the supply of railway wagons to assist in clearing the Fr^ich
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ARRANGEMENTS IN THE FIRST THREE YEARS 18»
ports ; as to the grant of facilities for the completion of certain
French vessels under construction in England.
Othet provisions are, however, of wider range and more per-
manent importance. The limitation on the British tonnage in
French service recommended by the Shipping Control Committee
was enforced by the grant or refusal of individual charter licences
by the Ship licensing Committee. This Committee considered
both the total ships in French service at the time and also the
nature of the work for which a particular vessel seeking a licence
was intended. Such a system obviously made impossible a respon*
sible control by France of her own shipping arrangements. It
was therefore provided in the agreement that so long as the total
tonnage was not exceeded the French Government should be the
sole judge as to use, and that time-charters, as distinct from!
charters for the single voyage, should be both allowed and en-?
eouraged.
The main importance of the agreement, however, consists in
its recognition that these emergency or arbitrary allocations of
tonnage were not satisfactory. It shows an evident desire to
extend co-operation on a basis of further and more complete
information. With this object it provides that France and Great
Britain should exchange monthly statements as to the employment
pf their ships ; that the transport of French wheat (for which,
however, all the ships were still to be provided by France) should
be arranged in consultation with the Wheat Executive ; that ships
taking coal to France should return with ore and pit-props for
England ; that all chartering of neutral steamers should be
centralized in an Inter- Allied Bureau in London.
The actual form of the document is not without interest. The
sequence of the clauses, which are strung together with no Ic^cal
connexion, gives clear evidence of the way in which the requests
for special assistance were negotiated into the document in the
course of discussions on principle.
These and other agreements were piecemeal and incomplete-
They did not, and in their nature could not, place the shipping
arrangements on a stable basis or prevent the constant occurrence
of new emergency requests for tomu^e. Little by Uttle these
requests, and the dislocation and disturbance they caused, forced
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140 ALLIED CONTROL
each of the three Govemments to increase its control and its
knowledge of its own most vital needs — and finally to combine
in an organization which enabled them to be measured against
each other.
The Inteb-Aixied Smppmc Combottee
An interesting though unsuccessful attempt at developing such
an organization was made in January 1917.
Opportunity was taken of an important Allied naval con-
ference in London to appoint an Inter- AlUed Shipping Committee.
It included representatives of Great Britain, France, and Italy,
and its object was to siu^vey the shipping needs of the three
coimtriesand to arrange a general plan for the allocation of tonnage.
This experiment proved entirely ineffective, partly because the
national work done by each of the countries in organizing its
supplies was insulBficient, and partly because the committee itself
was constituted on a wrong principle. It included neither
Ministers with power to speak on behalf of their several Govem-
ments on questions of poUcy, nor o£Gicials responsible for the
current work of arranging ships and supplies. It was useful
chiefly in discovering by its own failure how an effective Allied
organization must be built.
Nothing has been said in this chapter of the other great Ally,
Russia, who made large demands on shipping. The arrangements
made with her were on an entirely different basis, and she was
out of the war before the later development of Allied co-operation.
Her supply arrangements were handled throughout in London,
not in Petrograd, and ships were provided and managed just as
if the supplies were British. In the summers of 1916 and 1917
the ships in this service, numbering at the height of the season
some 250, were a serious factor in the whole position. But this
demand upon tonnage had of course ceased in the next year, 1918,
when the other Allied demands were greats, and throu^out the
negotiations with Russia were outside the main line of develop-
ment.
At the end of 1917 the shipping arrangements with France
and Italy were still on the basis described above. But by that
time the increasing seriousness of the supply position, and the
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ARRANGEMENTS IN THE FIRST THREE YEARS 141
entry of America into the war, made it important to devise a more
satisfactory basis — and the development of the national control
system made it possible.
Note as to Conteol in France, Italy, and America
The description of national control in this book is necessarily
confined to Great Britain. The writer has neither the knowledge,
nor the space, to give a similar accomit of the corresponding
controls in the Allied coimtries. This omission is of less import-
ance because the Allied organization now to be described had its
centre in London and was built up mainly on the British system.
It could never have beeh successful, however, if there had not
been effective control both of shipping and supplies in France,
Italy, and America. The reader must throughout remember the
existence of these controls, and it may be well to conclude this
chapter by a very brief note as to some of their main features.
In Italy the Government controlled shipping imder two
systems. The first, under Royal Decree of January 1915, was
similar to the British system. Vessels were requisitioned on time-
charter at a fixed rate of hire (somewhat higher than the British
scale) for Government cargoes, the owner finding and paying the
crew, but the Government bearing the running expenses and
TnATiAging the vessel. In the following year (January 1916)
a different system was introduced with the object of utilizing
the owners' organization and giving them a direct inducement to
expedite dispatch. Instead of being paid a time-charter rate they
were paid so much per ton dehvered. This second system, however,
proved impracticable after a time and all vessels were requisi-
tioned on the time system. Before the end of the period we are
now considering, the control was complete and effective. More
than nine-tenths of Italy's imported supplies consisted of cereals
and coal, and the extrcone shortage of both from an early date
compelled complete Government control of purchase, transport,
and distribution.
In France the extension of control proved a more di£Gicult
problem. Her imports were more varied ; the shortage in coal
and cereals developed somewhat later, and for the greater period
of the war was probably not so serious as in Italy. For some time
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142 ALIJED CONTROL
France either requisitioned vessels on ' bare-boat ' terms (i,e. the
Government took the vessel outright and provided the crew and
made all the arrangements itself ) or was content to charter, or leave
imports to the ordinary commercial conditions. The first method
was appropriate if the vessel was required for combatant service,
but was clearly unsuitable for import work ; the second and
third gave excessive profits and inadequate control over imports.
Chartering continued to occupy a proportionately bigger place in
the French than in either the British or Italian systems. But
requisition on time-charter was gradually introduced, and ulti-
mately control was extended over all French ships. More
complete measures were also taken to control supplies and in
1917 the whole import system was placed under the effective
control of a committee imder the chairmanship of the Ifinister
of Commerce.
America began to requisition her shipping in 1917, with the
special difficulty that rates had been high for some years and that
vessels had changed hands at correspondingly increased values.
She therefore had to pay much higher rates than Great Britain.
Her control developed quickly and was exercised drastically under
the pressure of her Army requirements in 1918. The allocation of
her ships to the most essential needs was greatly assisted by
a vigorous and effective department in charge of the licensing
of imports. Throughout the war the restriction of imports was
effected much more by deUberate selection and prohibition and
much less through the allocation and withdrawal of ships than
in Great Britain. In dealing with consumption America relied
much more than the European AUies on voluntary appeals fot
reduction, whidi were wonderfully effective. One day the roads
and streets would be crowded with motor-cars. The President
would appeal for economy ; and the next day not a car would be
seen. The European AUies wanted wheat and the Food Control!^
issued an appeal to the pubhc to eat maize-bread. The result
was again instantaneous and overwhelming. With her immense
production America's problem was, of course, not to deal with
a shortage of her own, but to supply from her own sufficiency what
the Exiropean Allies most needed on financial terms which were
possible for them. It is sufficient for our present purpose to
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ARRANGEMENTS IN THE FIRST THREE YEARS 143
mention without description the two measures taken by America
which were most important for the Allied system. The Food
Controller acquired full authority over food and henceforth made
block agreements, at fixed prices with the Allies, instead of leaving
them to buy from individuals. The War Purchase and Finance
Board, imder American chairmanship, but meeting in Paris and
London, arranged the allocation of credits for American purchases
and for this purpose €tcted upon the advice of the Programme
Committees.
In France, Italy, and America, as well as in Great Britain,
therefore, we find by the end of 1917 a system of control, both
of ships and supplies, which, with many variations of form and
method, was complete and effective.
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CHAPTER II
THE AUTUMN OF 1917
The General Shipping Position. Its Gravity. Its elements of hope. Improve-
ment of National Organization. Need for Allied Organization. The Agreement
of November 8» 1917. Its ess^tial principles : * pooling ' of use of tonnage ;
equal sacrifice. Negotiations with American Mission.
In the autumn of 1917 the prospect was less desperate than
in the spring, but the actual pressure on shipping was even greater;
17,000,000 tons d.w. of the world's tonnage had been lost
and less than half had been replaced. Great Britain alone had
lost 10 million tons d.w. and, even after allowing for the ships
she had captured as well as those she had built, had sustained
a net loss of over 4 million tons d.w. France and Italy had lost
about 2 million tons d.w. and had built practically notUng. Still
more ominous and menacing was the fact that considerably more
tomu^e was lost in the first ten months of 1917 than in the previous
thirty months of the war. Nor had America yet begun to build
seriously. At the same time the demands of the war upon shipping
were greater than at any previous period. All the distant ex-
peditions (except the long-abandoned one to the DardaneUes)
were fully maintained, and both troops and supplies were being
sent to Salonica, Mesopotamia, Palestine, and East Africa. Drafts
were still required from Canada, South Africa, Australia, and
New Zealand. The scale of the war in Prance was continually
increasing and the development in the character of warfare was
constantly involving a larger expenditure of munitions and
a larger ratio of supplies. The Navy was at its maximum' strength
and its demands on merchant tonnage for its anti-submarine
activities alone were very heavy. As a climax to these difficulties
were the anticipations of the most serious food troubles througji-
out the winter and spring in Great Britain, Prance, and Italy alike.
The way in which the position presented itself at the time is
shown in the document reprinted on p. 285. Perhaps it was
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THE AUTUMN OF 1917 145
fortunate that some of the worst factors in the problem were
then unknown. It was impossible to anticipate that shipping
was to be frozen up in the harboxir of New York by an imprece-
dented frost, that eJl the coal supply of France would be dislocated
by a German advance on the Pas de Calais coalfields ; that
military disasters would require (and would obtain) the transporta-
tion and supply of more than twice the number of American
soldiers originally contemplated.
In merciful ignorance of these new troubles of the future it
was easier, as it was essential, to keep a balanced judgment under
the almost overwhelming pressure of the daily requirements by
taking a somewhat longer view. The brighter features in the
position were that the inunense building resources of America
promised ultimate relief if only the next year could be endured ;
that the losses, though three times greater in 1917 than in the
earlier years of the war, were far lower at the end of that year
than at the beginning ; and that the organization both of shipping
and supplies was now much more adequate to its task.
In the autumn the British Cabinet took energetic measures.
They estabUshed a Committee of Cabinet Ministers with instruc-
tions to effect a much more serious reduction in the British
supply programmes than had ever been attempted. This Com-
mittee succeeded finally in making arrangements which gave the
shipping authorities rather more breathing space than they had
had throughout the year. The reductions gave the inestimable
advantage of a small margin of tonnage outside that allotted
to British supplies which could be used to meet the current
emergencies of the Allies while the new Allied organization was
still being formed.
National Organization at the end op 1917
The British Ministry of Shipping by this time had full and
effective control of all British ships, over their every voyage and
their every cargo. Shipments even on the liners were made in
accordance with official orders with just sufficient mai^in and
elasticity to enable the local organization of the owners to be used
and to secure the best loading of the ships. These orders to the
1M9.33 T
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146 ALLIED CONTROL
liners and the allocation of the fully requisitioned tramps were
both arranged on the basis of a single central plan for all British
transport requirements and for any AUied transport for which
the British Government had accepted responsibiUty. A complete
system was in working order for supervising every vessel and
making the utmost use of return voyages. Li addition, the voyages
and movements of all AUied vessels (and indeed of all ocean-going
vessels in the world) were known and carefully watched. Central
control of shipping, indeed, was not yet achieved but much of the
information and organization required for it were already avail-
able.
The control of supplies, too, had become much more complete
and effective. The numerous controls of the different commodities
were now grouped under a few big departments. Their experts
and officials had gone far towards acquiring the knowledge, the
point of view, and the habit of corporate work necessary to frame
central programmes and to determine the comparative importance
of the various suppUes. The necessary reductions were grave,
but it was becoming possible to forecast and to distribute them
beforehand on the basis of a general plan. The supply depart-
ments were able through their detailed organizations to take the
necessary measures to minimize the evil consequences. Con-
sumption and production might have to be restricted, but it was
now possible to prevent spasmodic shortages ; to prevent indus-
tries being brought to a sudden standstill by the lack of some
particular raw material while other supplies were being left unused ;
to avoid the risk of starvation following upon unnecessary con-
sumption. The way in which the most important reductions
were arranged by a Cabinet Committee in Great Britain has
already been described. Similar work was at the same time done
in France by a standing committee under the chairmanship of
the Minister of Commerce. For Italy the problem was somewhat
less intricate because all her imported supplies were almost
negligible in comparison with her two main import requirements
of coal and cereals and both of these were, and had been for some
time, under close and effective control.
The national organization, therefore, which is the indispensable
condition of international control of the kind later developed, was
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THE AUTUMN OF 1917 147
already in existence and effectively working. It was, however,
for the time being, working in each country with very little
relation to the corresponding work in other countries. There
was indeed consultation from time to time between the Munitions
Ministers and experts of the three European AUies ; the Wheat
Executive was already examining, and to a large extent deciding,
the wheat purchases and supplies of these three coimtries on
the basis of a single and comprehensive survey of the position ;
the British shipping authorities were in close contact with the
Allied authorities who needed British transport. This inter-
Allied co-operation, however, was very tentative and incomplete.
With few exceptions each country was ignorant of the nature of
the needs of the other countries. There was no means of saying
whether in any particular commodity, or in general, the standards
of sacrifice and restriction were approximately equal or not.
It was, however, becoming evident by tiiis time that such
information, and action based upon it, were essential if the grave
transport difficulties of the ensuing winter were to be endured.
The question was advanced by the visit to England of the French
Minister of Commerce. He had been convinced by the work of
the Committee over which he had presided in France that it was
essential for France to have further assistance during the winter,
that the effective application of a principle of equal sacrifice would
give her extra assistance, and that the most pressing need of all
was to share the importation of food, and especially of wheat.
Continuous discussions took place in the early days of November
between the French Minister of Commerce and British Ministers
and officials on this subject. In the actual shipping position it
was obvious that any new organization would in fact mean the
supply of further British ships to France and Italy, and some
limitation upon the British control of those ships. There was,
moreover, insufficient information to enable a principle of equal
sacrifice to be applied exactly. There was, therefore, a not un-
natural fear that the acceptance of such a principle would present
many dangers from the British point of view. This fear is reflected
in the tentative chwacter of the development which is explained
and illustrated in the documents printed at the end of this book*
L2
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148 ALLIED CONTROL
Agreement of November 3, 1917
The discussions between the French and British Governments
referred to above were enlarged by the association of Italian
representatives and resulted in an important agreement of Novem-
ber 3, to the following effect :
The GU>vernments of Great Britain, France, and Italy find that owing
to the failure of the French and Italian harvests, the submarine warfare,
and other causes, there is not sufficient tonnage for all their wants. They
consider that, of these wants, food is the most important, and can be
treated separately ; the amount of food that has to be imported is known ;
and they think that the burden of providing the tonnage for carrying it
should be a common charge on all the Allies including the United States ;
but inasmuch as the need for an immediate arrangement is pressing the
three (Jovernments are prepared to accept the responsibility of providing
the tonnage that may be required proportionally to their respective means
of transport with or without the help of the United States.
The three (Jovernmentfe further agree that they will proceed forthwith
to examine the other hardly less important needs of the Allies.
This agreement is not very lucid in its terms. It might mean
much or little, according to the interpretation placed upon it.
It seemed to contemplate a pooling of tonnage for food but not
for other imports. But the tonnage was to be provided ' propor-
tionally to the respective means of transport '. This could not
mean the mere application of a mathematiccd formula. It would
have been absurd to say that if Great Britain, for example, had
7,000,000 tons engaged in importing, France 2,000,000 tons, and
Italy 1,000,000 tons, the tonnage required for the agreed food pro-
gramme of the three countries should be provided in the proportions
of seven, two, and one, without regard to the nature of their needs.
The only other interpretation, however, was that shipping should
be allotted after a conmion examination of all the demands upon
the interchangeable tonnage of the three countries. This in
practice almost did away with the distinction made in the agree-
ment between food and other imports, except that it expressed
some recognition that food should in general have priority. The
agreement, therefore, in spite of the obscurity of its terms, was
of great importance because it practically admitted the principle
of pooling the use, though not the management, of tonnage for
all purposes.
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THE AUTUMN OF 1917 149
The next fortnight was devoted to working out the main lines
of a more detailed agreement and organization to give effect to
this principle. The kind of considerations involved is shown
in a memorandum produced on p. 281.
Negotiations with America, November 1917
In the meantime the area of negotiation was widened by the
arrival of an important American Mission in London under
Colonel House, accompanied by a member of the American Ship-
ping Board, and on November 20 the following important
principles were suggested by the British Government and proved
generally acceptable to the American Mission:
(a) That America, France, Italy, and Great Britain should all tabulate
and make available to each other a statement showing in detail, and as
nearly as possible in the same form, each class of requirements for which
tonnage is needed, and, secondly, the tonnage now available and likely
to be available in future through new building, &c. These having been
classified (showing the source of supply, &c.), and having been adjusted
(1) to secure a reasonably uniform standard of adequacy both as between
classes of commodities and as between countries; and (2) to bring the
total within the carrying capacity of the Allies as a whole, would form
the basis on which the general allocation of tonnage would be determined.
The calculation would be revised at convenient intervals in the light of
losses, new building, war requirements, and other factors in the problem ;
but it would be an essential feature of the scheme that, subject to such
periodical re-allocation, each nation should manage and supervise the
tonnage under its control.
(b) That all four countries should agree that the neutral and interned
tonnage obtained through any channel and by whatever country should
be used in such a way as to increase by an equal extent the tonnage in
direct war services, the extra tonnage being allotted, so far as practicable,
to the most urgent war need of any of the Allies. The method of allocar
tion must be worked out later, but it is important that the principle
should be recognized that it is urgency of war needs and not the method
by which the tonnage has been obtained that should be the criterion.
(c) Steps to be taken to bring into war service all possible further
tonnage, such as in South America, Sec.
(d) Control over cargoes carried to be such as to ensure that they
satisfy the most urgent war needs in respect of which the tonnage has
been allotted.
It was understood in connexion with these resolutions that
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160 ALLIED CONTROL
Allied bodies for the different main requirements, for food,
munitions, and raw materials, would be formed on the model of
the Wheat Executive, and the hope was expressed that America
would be associated with these bodies, and that she would at the
same time send a shipping delegate to London.
This represents the point reached in the negotiations for a new
Allied control organization before the Paris Conference of a week
later at which the final decision was taken.
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CHAPTER III
THE FORMATION OF THE ALLIED MARITIME
TRANSPORT COUNCIL
The Paris Conference of November 1917. The * Special Committee for
Maritime Transport and General Imports '• The Memorandmn presenting the
problem and proposing a solution. Agreement on principles of co-operation.
The rejection of the proposal of an International Executive Board. The
acceptance of the * Wheat Executive ' principle. The formation of a Council
of Ministers and a permanent Executive.
The Paris Conference which began on November 29, 1917, was
perhaps the most impressive expression the war had seen of both
the range and unity of the AUied effort. Delegates were present
from practically all the AUies united in war against the Central
Powers. The representative of another great Power, the United
States of America, now joined for the first time in formal conference
those of France, Great Britain, and Italy. The earUest combatants,
Belgium and Serbia, found with them the later entrants, such as
Greece, Roumania, and Portugal. The Far East was represented by
China and Japan. Cuba, Montenegro, Liberia were there, and even
Russia, though far gone in the throes of her revolution, was
represented by an officer who derived his authority from the days
in which she had been an effective Ally. Perhaps no such vivid
presentation has ever been given of the infinite range and vitality
of the countries and forces united in the AUied cause as on the day
on which each of these representatives described in turn, in a series
of remarkably eloquent speeches, the economic position of his
country and the nature of her contribution to the war. The Con-
ference thus afforded a unique opportunity for the creation of a new
instrument to achieve and to enforce AUied unity of effort.
The Conference at once divided into two main sections — the
first miUtary and the second economic. The second formed special
committees for various economic questions, and among these, as it
was clear that shipping was at the root of the whole economic
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152 ALIJED CONTROL
position of the Allies, was a ' Special Committee for Maritime
Transport and General Imports '.
It is with the work of this Committee alone that we are here
concerned.
The full Committee included representatives of practically
all the AlUes^ but the detailed work was carried on by those of
America, Great Britain, France, and Italy, who met continuously
from day to day both formally and informally.
The document handed in by the British representatives and
reprinted on p. 285 was taken throughout as the basis of the
discussions.
That document, it will be seen, begins by describing the
general shipping position which has been briefly summarized in the
preceding chapter. It then proceeds to an argument that America
was in a position to give substantial tonnage assistance to the
European Allies. At this date it was contemplated that the
American Army would be transported at a rate sufficient to secure
1,000,000 men in France by the end of 1918. On this basis the
argument that America could supply tonnage was perfectly sound.
The position was, of course, completely changed after the military
reverses of the following spring. American soldiers had to be
hurried over so rapidly that there were 2,000,000 men in France
by the autumn instead of 1,000,000 by the winter. With the
earlier and less ambitious military plans before them the Committee
agreed upon a statement representing the demand which in their
opinion the situation made upon America.
This statement urged (a) an American building programme
at the rate of 6,000,000 tons gross (i.e. 9,000,000 d.w.) instead
of 6,000,000 tons d.w. ; {b) the immediate provision of 500,000
tons d.w. of American shipping to assist France and Italy and the
gradual increase of this amount to an average of at least 1,250,000
tons.
The Committee fiuther urged that America should take every
possible step to bring into war service neutral and interned vessels
then idle or engaged in civilian work ; that she should obtain the
majdmum assistance from Japan ; and that she should reduce her
own requirements of imports, e. g. by restriction of civilian con-
sumption, and should requisition drastically from her own trade.
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ALUED MARITIME TRANSPORT COUNCIL 153
Action of this kind was of course within the sole competence
of America, and the Committee could do no more then present to
her thdr own view of the necessities of the situation.
Their consideration of a form of co-operation in which all the
great Allies would combine was of much more practical importance
and more within their own sphere of competence as an Allied
Committee.
Peinciples of Co-opeeation
Within this sphere the Committee agreed, by unanimous
resolution of the delegates of the four great Powers, that it was
necessary to arrange a form of co-operation which would secure the
following objects :
(a) To make the most economical use of tonnage under the control
of all the Allies.
{b) To allot that tonnage as between the different needs of the Allies
in such a way as to add most to the general war effort ; and
(c) To adjust the programmes of requirements of the different Allies
in such a way as to bring them within the scope of the possible carrying
power of the tonnage available.
Considerable discussion ensued as to the main principles on
which this co-operation should be secured. Some of the delegates
thought that it was practicable to form a pool of tonnage in the
fullest sense and to entrust its management to an international
board with full executive authority. This proposal had been dis-
cussed in the earlier meeting in London, but those who had most
experience of the actual work of controlling shipping were strongly
of the opinion that it was impracticable. The reasons are discussed
at length in Part V of this book. It is sufficient to say here that
the arguments which had prevailed in London ultimately carried
conviction in Paris too, and that the Committee expressed their
decision on this vital question in the following report based upon
the document presented to them by the British representatives :
An International Board with complete executive power over a common
pool of tonnage had been proposed, but has been rejected for the following
reasons :
It would be difficult for any country, and particularly for America or
Great Britain, to delegate absolute power to dispose of its tonnage (which
is the basis of all its civilian and military requirements) to a representative
in an International Board on which he might be outvoted. Such a Board,
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154 ALLIED CONTROL
moreover, would not lead to administrative efficiency, partly because the
complete control of all tonnage can scarcely be well concentrated in one
place and partly because representatives upon it would tend to be at
once out of touch with the actual administrative machinery and at the
same time scarcely invested with sufficient authority to make reductions
in the various supjdy programmes, munitions, food, &c.
The Conimittee proceeded to enunciate the principle that
The problem of the allocation of tonnage is largely a problem of securing
that the different requirements which make demands upon tonnage should
be adjusted in the fairest and best way, and these requirements can only
be so restricted by the experts in each class of commodities. It is, for
instance, impossible for any except the munitions experts of the different
AUied c6untries to deal with the restriction of the Allied munitions pro-
gramme within specified limits.
The Conimittee therefore endorsed the reconunendations al-
ready made at the London discussions and recited at the end of the
previous chapter. Of these, the essential principle was that aU
Allied programmes should be examined together and that they
should be reduced to an equal standard of adequacy and that all
Allied shipping should be allotted on the basis so obtmned.
To give effect to these reconunendations the Committee con-
sidered that Allied bodies for the different main requirements for
food, for munitions, and for raw materials, should be formed on
the model of the Wheat Executive, America being associated with
these bodies.
The A.M.T.C.
So far the Conmiittee had followed very closely the recom-
mendations made to them as the result of the discassions in
London. The elementary principles of co-operation had now been
discussed, formulated, and agreed ; but the enunciation of sound
principles, as many previous conferences had shown, is of little use
in itscdf • Fortunately the Conmiittee went further and considered
the organization necessary to give effect to them. The Committee
declared that it was ^ necessary in order to obtain decisions by the
respective Governments that each country shall designate one or
two Ministers — ^the United States one or two special del^ates —
who will be responsible towards their respective Governments for
the execution of the agreements arrived at and who will meet in
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ALLIED MARITIME TRANSPORT COUNaL 155
conference as Allied representatives as may be necessary from time
to time, whether in Paris or in London, according to the circmn-
stances of the case, either on their own motion or at the request of
the Executive Departments \
Finally the Committee resolved that ' for the purpose of carry-
ing out the conunon policy above indicated the appropriate
Ministers in France, Italy, and Great Britain, together with
representatives of America, shall take steps to secure the necessary
exchange of information, and co-ordination of policy and effort,
establishing a permanent office and staff for the purpose '•
These recommendations were adopted by the Conference, and
the appointment of the ^ Ministers and dd^ates ' and the estab-
lishment of the ^permanent staff and office' constituted the
organization of the Allied Maritime Transport Council and its
Executive.
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CHAPTER IV
THE FIRST MEETING OF THE COUNCIL (MARCH 1918)
Shipping Problems in the first months of 1918. Stress and anxiety at this
period. Contrast with the superficial appearance. AUocation of Tonnage on
basis of Wheat Executive programme. Coal for Italy. Coal for France.
Difficulties of supply and discharge. First Meeting of the Council (Mardi 11,
1918). The first World's Balance Sheet. Dutch Tonnage. The French Coal
Committee.
Undeb the authority of the decisions of the Paris Conference,
and by the instructions of their several Ministers, the officials who
subsequently formed the Allied Maritime Transport Executive
at once b^an to organize and develop their new work. This was
a problem partly of constructing a new organization and partly
of preparing their several national departments for the new
methods and the new principles. In the midst of this, however,
they found themselves plunged into the practical problems of
finding and allotting ships for the most urgent requirements of the
moment.
The needs were indeed too pressing to wait for any new organiza-
tion. The spectre of famine was more terrifying than at any
previous period, and the cry for more ships to transport food was
only one of a host of equally insistent, but mutually destructive,
claims for transport.
It is difficult to present an adequate picture of the stress and
anxiety under which the competing demands for transport were
dealt with in the last year of the war. The reader must remember
that the uses of the supplies for which ships were asked were
multitudinous beyond the detailed knowledge of any human
brain. The many competing claims upon the single pool of ships
were, it is true, each represented by their own experts. But the
demands put forward as the minimum, failing whidi disaster must
result, by all these different groups were always in total beyond the
capacity of the shipping available ; and it was a task of extreme
difficulty to decide between them. Now and then disaster was
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FIRST MEETING OF THE COUNCIL (Mab. 1918) 157
indeed within a few days. At one period six sugar ships were
torpedoed in a few days and the central stocks of sugar in Great
Britain w'ere reduced to ten days' consumption. Normally, the
disaster was a little more distant, but even more serious.
And the stress was the greater through the contrast between
the situation as it was seen by the few people concerned with
the control of ships an^ the comparative complacency of both
the pubhc and the greater part of the official world. The whole
supply system went on with few visible signs of the weakening of
its foundations — ^and so it would go on till the moment of the crash ;
when the crash would come could not be foretold, but on the best
expert evidence it was likely to come at any moment and seemed
certain to come soon. I remember a visit paid to Paris with the
chairman of the Wheat Executive and the head of the Commercial
Branch of the Ministry of Shipping in January 1918. There was for
a moment a lull in the mihtary struggle, both sides preparing for
the final contest of the spring and summer. Shipping losses had
continued in excess of building throughout the previous year.
But their seriousness had been disguised by the figures of arrivals,
which included the arrivals of small coasting vessels never seriously
at risk. The harvests in Great Britain and France and Italy had all
been poor and starvation was threatened in all three countries
before the end of the smnmer. But the supplies of the last harvest
still met current consumption. Munitions declared to be vital for
the next campaign had been ordered in America for deUvery
beyond any probable capacity of the tonnage to carry them. But
the stocks in France were still sufficient for current needs. The
whole mechanism of civilian and military life was threatened but
for the moment was unhindered in its daily operation. Food and
munitions were both demanding, on pain of crushing disaster in
the near future, more and yet more ships. But there were no more
ships for food except at the expense of munitions, or for munitions
except at the expense of food. The only hope of reUef was to
increase the supplies of wheat from the nearest source. North
America. We came to arrange a joint telegram of appeal from the
three Prime Ministers of the European Allies — ^an appeal duly sent
and generously answered. Paris and Versailles, as we arrived,
were beautiful as in the days of peace in the splendour of sun and
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168 ALLIED CONTROL
brilliant weather ; most of the comforts of life seemed still avail-
able; there was little to suggest the hidden stress except the
darkening of the streets in the early evening. But coming to find
some relief for food, we were at once met with a new crisis : a
threatened shortage of the coal on which transport for military
operations depended. And within a few weeks the benefit of
America's additional supplies of food wer^ to be largely destroyed
by the disaster of an unprecedented frost on the Atlantic coast
immobilizing shipping for some weeks. A few weeks later the
coal crisis was to be rendered still more serious by the German
advance on the northern coalfields and the whole shipping position
by the threat to the English Channel. A little later still the
problem was again to be changed by the need to transport an
inunensely increased American Army and their suppUes to meet the
military disasters in France. In the meantime ships had to be
allotted to one service or another with results that those taking the
decisions could not possibly forecast. Any one of the current
decisions of the day's work might be the one that would bring the
crash It was like hearing the tapping of the sappers construct-
ing a hostile mine which the rest of those who were threatened
failed to detect — ^and waiting for the last ominous silence before
the explosion.
Pbogbess of Allied Methods
For the time the work had to proceed on the old method of
negotiations between the British authorities and the AUied supply
departments. But the agreement of November 3, which pre-
ceded the decision to form the A.M.T.C., steadily drove action on to
international lines even before the Council itself was formed.
The Wheat Executive already bought and distributed on an
Allied basis, adjusting the several quantities as nearly as could
be determined in proportion to the real needs of the different
countries. At the beginning of March the British Ministry of
Shipping agreed, under certain conditions, that they would
supplement the AUied tonnage with British ships so as to enable
this programme to be carried out. Hencefortli the three coun-
tries each had the ships required for their agreed shares of the
supplies, or if deficiency was inevitable, shared it in approximately
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FIRST MEETING OF THE COUNCIL (Mae. 1918) 159
equal proportions. This replaced the old arrangement under which
France and Italy, with the aid of a fixed and limited number of
ships for all purposes, found the transport for their own wheat or,
failing to find it, lost their cargoes. In practice each country now
ordered the ships under its own control to loading ports and Great
Britain ' diverted ' the required amount of space in her liners,
or the required number of tramp transports, to France and Italy
by orders to the loading ports. This marked a development of the
greatest importance and several of the documents reprinted in
Part VI of this book (see p. 810) illustrate the difficulties of
the new method and the not unnatural reluctance of the British
Ministry to be committed to it. For when Great Britain imder-
took to supplement the deficiencies of French tonnage sent by the
French Government to lift French wheat, it followed as a necessary
consequence that the allocation of French tonnage to other pur-
poses (e.g. the conveyance of cargoes of a commercial rather than
of national importance) meant the diversion of extra British
tonnage to the wheat programme. The agreement was therefore
subject to the condition that ' the Ally from whom tonnage is
requested is satisfied as to the allocation of the tonnage and the
arrangement of the supply services of the Ally claiming it '. This
condition gave the British Ministry a theoretical right to exercise
some control over all Allied supplies. The preLctical exercise of this
right was, however, restricted by the limits of its knowledge. The
programmes themselves were, of course, known but it was a very
different matter to determine the real importance of the different
needs behind them. The exercise of the control in fact required
a full knowledge which the Programme Committees were after-
wards created to obtain. In the absence of this organization,
continuous British pressure rather than real control was exercised.
This pressure did indeed result in certain economies in the use of
AUied transport and considerable reductions in the Allied pro-
grammes. The penal character of the condition was, however,
held in reserve. It was not in fact enforced, and tonnage was duly
allotted in accordance with the wheat programme. There were,
of course, months in which tonnage allocations were short ; but on
the whole, both before and after the constitution of the Council
itself, transport was henceforth arranged for both France and Italy
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160 ALLIED CONTROL
on the basis of their agreed shares. In the first month after the
letter of March (April 1918) 109,000 tons of cereals were ' diverted '
to France and 92,000 tons to Italy.
Coal foe Italy
The next most urgent question was that of Italian coal. Italy
produces practically no coal herself, her annual pre-war coal output
being less than 750,000 tons. . Her industries, both before and during
the war, were dependent upon imported coal, and in 1913 she
imported and consumed 11,000,000 tons. Under the pressiu'e of the
shortage of both coal and ships during the first two years of the war,
her consumption had been reduced to between 7 and 8,000,000 tons
(in spite of the needs of her munition manufactiu*es), and it was
just possible for her to manage on this quantity. In 1917, however,
her monthly imports had only averaged about 440,000 tons, or
only a little over 5,000,000 tons for the year, and she had made up
the balance by drawing upon her reserve stocks. Now when the
difficulties of transport were greater than they had ever been,
these reserve stocks were exhausted, and it was necessary to
arrange the transport of an extra 160,000 tons a month unless her
consumption was to be reduced below 600,000 tons, which would
have meant a dislocation both of her railways and hermanufactures«
The Italian claim was that Italy's annual need was for 800,000 tons
a month, and that 690,000 tons was her bare minimum. After
a careful examination by the Allied officials in relation both to the^
Italian needs, the generaJ shortage of tonnage, and the nature of the
other supply programmes, which would necessarily be prejudiced
by the allocation of extra tonnage to Italy, it was admitted that
even under the extreme pressure of the time the dispatch of
600,000 tons a month must be assured. The provisional assent
of the British Ministry of Shipping, upon which the practical task
of finding the extra ships would necessarily fall, was obtained
subject to confirmation by the Coimcil when it met. These
arrangements were made during February, and executive action
was begun without waiting for the meeting of the Council in the
next month. In fact, in the first complete month after the arrange-
ment took effect, 625,000 tons were dispatched as compared with
the average of 440,000 tons of the previous year.
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FIRST MEETING OF THE COUNCIL (Mab, 1918) 161
At the same time the contact of the officials of the three
countries in the n^otiations enabled an important economy in
coal transport to be effected. Hitherto all coal to Italy had gone by
sea from the United Kingdom. It was calculated, however,
that a considerable saving in sea transport, and some reduction
in submarine risks, would be effected if Italy could receive a part of
her coal from the French southern mines (France being com-
pensated by extra Channel shipments) and a part from coal shipped
from the United Kingdom to a French port and then railed across
France. This meant a saving of sea transport at the expense of
extra railway transport and involved elaborate and intricate
arrangements dependent upon the co-operation of the coal, ship-
ping, and railway authorities of the three coimtries. The following
scheme was finally worked out and agreed :
A. 150,000 tons of British coal to go by sea route to Italy ;
B. 100,000 tons of British coal to go to the French Bay port
Blaye and be railed across France ;
C. 270,000 tons of French coal to go by rail to Italy ;
D. 180,000 tons of French coal to go by rail to the south of
France and then by short sea passage from Marseilles or Cette to
Italy. France was to receive compensating coal and transport for
the French coal so supplied.
This scheme was recognized as involving a great and perhaps
impossible strain on the railway system in France, which was of
course subject to all the changing exigencies of military operations.
In the event the strain thrown on the railways by the German
advance in the spring interfered with the complete execution of
this plan and a larger proportion of the coal had to be sent by the
long sea route. An average of over 300,000 tons a month, however
(as compared with the 450,000 tons of the programme), was dis-
patched either wholly or in part by rail and the relief afforded to
the long sea transport was of great importance.
Coal fob Fbance
One of the constant difficulties experienced both in arranging
and in executing the scheme was the determination of a basis on
which to compensate France for the suppKes of French coal sent to
Italy* It was, of course, useless to provide that 350,000 tons
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162 AI.UED CONTROL
extra should be shipped to Frimce without determining dearly
what was the amount to which this quantity was to be additional.
And this was a matter of extreme difficulty. During 1916 and
1917 the imports of coal from the United Kingdom to France had
averaged 1,500,000 tons a month. It was urged that in view of t^e
increase in the manufacture of munitions and for other reasons
this quantity was insufficient. The determination of a minimum
figure for France was much more difficult than for Italy because of
the greater variety and complexity of her factories dependent
upon coal, the more variable needs of railway transport for
military purposes, and her greater domestic consumption. A purely
provisional figure of 1,740,000 tons was adopted as a working
standard without any real assurance that it could be attained.
In the result the standard proved useless and the whole replace-
ment arrangement was rendered ineffective because ships ceased
to be the limiting factor. The French ports were only able to
receive a quantity which was considerably and obviously below any
theoretical quantity for which France was entitled to transport
under the above agreement, and the strict determination of the
standard therefore ceased to be necessary.
These were the most important of the definite tasks with which
progress was made before the organization was formally established.
In the meantime an informal meeting of representatives of the
four countries, held at the Foreign Office in London in February,
made the final arrangements for setting up the new AUied oi^ani-
zation; chose its name (' The AUied Maritime Transport Council ') ;
provisionally i^pointed its secretary; and decided that the
Council itself should meet in March.
First Meeting of the Council
The Allied Maritime Transport Council met for the first time
and was formally constituted at Lancaster House, in London, on
Monday, March 11, 1918, and continued in session until Thursday,
the 14th. It had a full attendance of members (see p. S98)
and in addition some six Allied Ministers and about thirty
responsible officials were in attendance. The Council during this
session approved the plan proposed for the transport of Italian
coal and the supply of replacement coal to France. It authorized
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FIRST MEETING OF THE COUNaL (Mae. 1918) 168
the appointment of a permanent staff of the Council and the pro*
vision of the executive machinery in accordance with plans already
prepared and submitted to it, and transacted a considerable mass
oi formal business. In addition, however, it received and con-
sidered a balance sheet of the imports requirements of the Allies
as a whole and the carrying power of the tonnage available to
meet them. This first balance sheet is of interest as being
the first formal document of the kind ever prepared. Its chief
importance, however, consisted in indicating the range of the
work that still required to be done before €uiy balance sheet
could be prepared upon which executive action could properly
be based. No information could be included for America, and
that as to Italy was very incomplete. Moreover, although the
British figures, which were based upon the recent and drastic
revision made by the Cabinet Committee, showed a reduction
in requirements of 4,000,000 tons, no similar revision had at
that time been made in the other national programmes, and the
figures were therefore not upon a comparable basis. On the tonnage
side it had not been possible to allow for the carrying power of any
additional neutral vessels (e.g. Dutch and Swedish) which might
be obtained, or of interned vessels (e.g. those in ChiU), the use of
which was also possible but hypothetical. The net result of the
balance sheet as prepared was to show that the tonnage available
was only enough to import a quantity less by 10,000,000 tons than
the imports shown as required, which was equivalent to a deficit
of 2,200,000 tons d.w. shipping continuously employed. The
elimination of some 10,000,000 tons, either by a prior reduction
in the programmes themselves, or failing that by the allocation
of the ships, was therefore the task that confronted the new
organization.
Dutch Tonnage
At the same time, however, the Council considered one method
of relief to the situation which, though not immediately, proved
later of substantial assistance. Nearly 500,000 tons d.w. of
Dutch tonnage had been lying idle some time in American ports,
pcurtly because of the submarine risk and partly through the pressure
put by the German upon the Dutch Government. The scheme con-
M2
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164 ALUED CONTROL
sidered at this meeting, though a promising one, proved abortive
and need not therefore be here described.
One further measure of importance was taken at this meeting
of the Council in connexion with the transport of coal. A com-
mittee, composed of representatives of the Italian Government
and of the French Ministry of Public Works, was appointed to sit
in Paris and watch the actual expedition of coal to Italy day by day
and to keep the Secretary of the Council informed.
By the middle of March, therefore, the new organization, though
undeveloped and incomplete, was already plunged into the midst
of the main problems which were to occupy it during the following
six crucial months.
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CHAPTER V
SECOND MEETING OF THE COXJNCIL (APRIL 1918)
Work of the Executive in March and Apnl. Difficulties of Coal Supply.
Economies in Shipping Arrangements. Second Meeting of Council (April 1918).
Programme Conunittees established : detailed resolutions. Neutral Tonnage.
Belgian Relief. American Transport.
In the month which elapsed between the first and second
meetings of the Coimcil, the Executive now constituted and in
working order made considerable progress with their task. They
at once experienced difficulties in the execution of the coal pro-
gramme as the result of the German offensive in March, which had
the following immediate consequences. In the first place, Allied
troops were at once recalled from Italy and this military move-
ment interfered with the railway transport of French coal to Italy.
The estimate at first furnished was a reduction of 2,000 to 2,500
tons a day for a fortnight, which would have only reduced the
360,000 tons going by this route to about 310,000 tons. The
Executive, however, decided, and as the event proved rightly,
that it would be wise to allow for a much bigger reduction. They
arranged for 100,000 tons of British coal, which had been destined
for Gibraltar and the Mediterranean, to be at once diverted to Italy,
the stocks at Gibraltar being replenished a little later by sending
British and French liners there with a cargo before their dispatch
across the Atlantic. The second consequence of the German
advance was even more serious. It reached near enough to the
Amiens-Montdidier line to make the passage of coal along that line
difficult and dangerous, and the result was that the supply of coal
to Paris from the Bruay mines was largely reduced.
Undet the revised arrangements 388,000 tons of British coal were
dispatched to Italy and 236,000 tons of French coal, as compared
witii the original programme of 250,000 British and 350,000 French.
During the same month the permanent staff of the Council was
organized into its different committees and their several functions
and duties were defined (see p. 298).
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166 ALLIED CONTROL
Shipping Economies
At the same time many useful economies were effected by
a detailed examination of the employment of Allied shipping pro-
grammes. Some of these, which are typical of a large number made
during the ensuing months, may be mentioned here as illustrating
the daily work of the Executive, The Italian Government possessed
a number of fast passenger liners with a lai^e consumption of
bunker coal and small cargo-carrying capacity. They had, however,
few needs for the transport of passengers and a very urgent need
for the transport of food. In these circumstances it was not un-
natural that they should have used a number of these vessels for
the conveyance of food to Italy. Simultaneously, Great Britain
and America required to carry large numbers of American troops
and were using for this purpose some vessels which were less
suitable for passenger carrying than the Italian liners. As soon
as this fact was revealed an arrangement was made by which the
Italian vessels were used for the conveyance of the American
(roops, while extra British tonnage was given to Italy to com-
pensate her for the food transport she thus lost. This resulted in
a real net economy to the advantage of all parties concerned. The
same examination showed that the French fleet in the Eastern
Mediterranean was being coaled to a large extent by shipments of
coal in large colliers to Bizerta, then transshipped into smaller
French vessels for conveyance to fleet bases of Salonika, &c. This
meant considerable delay, but could not well be avoided without
the use of tonnage outside the control of the French Government
itself. A saving was again effected by sending the coal direct to
the fleet and using hulks instead of ships to store it till required.
Great Britain, again, had chartered certain neutral tonnage suitable
for nitrates, but only on condition that it should not be used in the
war zone. The only way she could employ this tonnage for her
ovm requirements was to ship the nitrates from ChiU up to a North
American port and then transship into a British vessel. Simultan-
eously, however, America was transporting nitrates from Qiili to
North America for consumption in America itself. It was an
obviously economical arrangement to use the neutral tonnage
imder British control to take nitrates to North America for con-
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SECOND MEETING OF THE COUNCIL (Apb. 1918) 167
sumption there in return for conveyance by American tonnage of
nitrates direct from Chili to Europe. Here again the arrangement,
whidi was only possible by combined action, was to the advantage
of all concerned. These are only three of a considerable number of
similar arrangements made during this and the following months.
Second Meeting of the Council
The Coimcil met for its second session at Paris during a grave
crisis in the Allied position. The German advance had dislocated
the coal supply of northern France and disorganized the railway
transport. Some of the British representatives had to reach
Paris by motor car from Boulogne. Those who went by rail took
thirty hours to travel from Boulogne to Paris. This was an
appropriate preface to the first question which occupied the atten-
tion of the Council, the supply of coal to France for the critical
needs of the moment. The general position was summed up in a
brief speech by the French Minister of Munitions. The Pas de
Calais mines had a normal output of 900,000 to a 1,000,000 tons
monthly. The great bulk of this coal was railed south and was an
essential part of the supplies of Paris and the surrounding country.
It was anticipated that hardly any of this quantity could be sent
south in the near future, partly because the movement of troops
and supplies necessitated the railways being kept clear of traffic and
partly because the mines were directly threatened by the Germans
and the coal output itself was considerably reduced. It was
estimated that some 400,000 to 450,000 tons monthly of extra
British coal would be required to redress the balance. Such was the
general effect of a grave report of a special coal committee which
sat and arrived at its conclusions while the Council was in session
in Paris.
Programme Committees Established
This, however, was only one of the problems that confronted
the Council, and indeed one of the least important, because, as the
event proved, the supply of coal to France could not be sub-
stantially improved by providing more tonnage. More important
was the Council's consideration of the revised balance sheet of
import and tonnage prepared by the Executive and the decisions
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168 ALIJED CONTROL
they arrived at in consequence. Only slight progress had been
made in reducing the deficit of 10,000,000 tons of imports, for as
soon as a reduction was made in one direction some new military
demands would appear from another, and in the estimates pre-
sented at this meeting the deficit still stood at 8,500,000 tons.
The Council considered the situation at great length, the
discussion centring round three main points : (1) the immediate
reduction of the programmes of import requirements ; (2) possible
sources of supplementary tonnage for imports, e.g. by a reduction
of the tonnage then reserved for naval and military purposes ; and
(3) the extension of the system of Executives or Programme
Committees with a view to scrutinizing the whole area of import
requirements. The resolutions which the Council adopted par-
ticularly with regard to the third of these subjects were of great
importance, as they constituted the authority for the definitive
constitution of the Programme Committees, and it will be well to
quote the whole of them at this point.
Resolutions
(i) The Allied Maritime Transport Council has considered and adopted
the appended statement of the general import and tonnage position.
(ii) In view of the gravity of the situation as disclosed by this state-
ment, the Council consider it to be their duty to bring the pdsition before
their respective (Jovernments with a view to immediate action.
It is clear to the Council that the deficit is so serious that it cannot be
met without a reconsideration of the military and naval demands as well
as the requirements of imports, particularly in view of the fact that any
further drastic reduction of imports would have important military
effects, as a large proportion of them are destined for military uses.. The
import of coal into France, for instance, so far from being capable of
reduction, requires to be substantially increased as an immediate military
necessity arising from the present offensive ; and the military necessity
for maintaining and if possible increasing the supply of coal into Italy is
well known.
The Council feel that if the deficit falls (as in the absence of a pre-
arranged plan it must fall) in a relatively haphazard manner and at short
notice upon the several services, whether import, naval or military, which
demand tonnage, the resulting dislocation and disaster are likely to be
much more serious than if anticipatory measmres had been taken.
(iii) In these circumstances, the Council considers that the following
action is necessary :
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SECOND MEETING OF THE COUNQL (Apr. 1918) 169
(a) That a further drastic revigion of the import programmes of the
several countries should be undertaken, and that the necessary orders to
this end should be given to the appropriate national and Allied bodies
which are now entrusted with the duty of arranging reductions and
adjustments of programmes.
Further, that in order that this work may be adequately performed,
either Allied Executives or Allied Committees appointed specifically for
the purpose of adjusting Allied programmes of imports should be con-
stituted immediatdy to deal with such commodities as are not dealt with
by existing Executives.
Further, that it is desirable that there should be an American repre-
sentative on each of these Executives or Committees who would be a full
member in the same sense as the representatives of the three European
Allies. .
(b) That the permanent organization of the Council should examine
the possibility of rendering available for import work any vessels hitherto
regarded as unsuitable.
(c) That there should be an examination by the appropriate military
authorities of the Allied Military Supply programmes (including the
American programme), with a view to ascertaining in what ways the
demands on mercantile tonnage could be diminished.
(d) That there should be a similar examination 'by the Allied Naval
Authorities of the possibility of reducing the demand by the Allied Navies
on mercantile tonnage.
(iv) Monthly statements of the actual imports into the foiur countries
during the preceding months shall be furnished to, and made available
for use by, the permanent organization of the Council.
(v) The permanent organization shall prepare for the information of
the Council a regular monthly statement of the tonnage position.
(vi) For the revision of the import programmes indicated in paragraph
8 (a) above the Council approves the detailed procedure described in the
following statement :
Le Conseil Allie des Transports Maritimes reconnatt que la juste
repartition du tonnage ne pent ^tre assur^e sans une ^ude approfondie
et une discussion technique des programmes joints.
A cet effet, le Conseil decide de confler la preparation de ces pro-
grammes aux Executives existantes ou aux Executives qu'il paraftra
expedient de constituer, ou, k leiur d^faut, k des Comit^s dits * des Pro-
grammes ', qui devront ^tre imm^diatement constitu^s.
D^s que la liste de ces Executives ou Comit^s des Programmes aura
ete constituee par le Bureau permanent du Conseil, les (Touvemements
associ^s s'engagent & en assmrer le fonctionnement imm^diat en d6signant
aussitdt leiurs repr^sentants.
Les Executives ou Comites ded Programmes sont invites k reunir et
examiner d'urgence les demandes des divers Allies et k presenter avant
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170 ALLIED CONTROL
la date du 15 Juin un projet motivant le montant des importations allouees
et reoommandant ies provenances ies plus favorables k la meilleure utilisa-
tion du tonnage.
Les projets des Executives ou Comites des Programmes seront versfe
au Bureau permanent du Conseil qui pourra, le cas ech^ant, proposer
Taction conjointe de plusieurs Executives ou Comity dont les progranunes
apparattront connexes.
Les programmes sp^iaiix des Executives ou Comites seront ensuite
systematis^s et group^s par le Secretariat permanent pour fitre pr^sentis
sous cette forme au Conseil Allie des Transpdrts Maritimes.
These resolutions should be read in conjunction with the
document printed on p. 301, which sets out the relation of the
Council to the Progranune Conunittees.
Neutral Tonnage
At the same meeting of the Council an important decision was
taken with regard to the chartering and allocation of neutral
vessels, which had the effect of adding considerably to the current
responsibilities of the Executive. It has been explained earlier in
this book that the European Allies necessarily had to supplement
their tonnage by chartering neutral vessels. For these they had, of
course, to pay in general the competitive rates of the market and for
a long time these rates were being forced up by direct competition
between the Allied Governments themselves. To prevent this an
Inter- Allied Chartering Conunittee had been formed and had con-
siderable success in retarding the increase in rates though not in
actually reducing them. The arrangement had been incomplete,
however, partly because, though most tonnage was chartered
through this Committee, certain neutral vessels continued to be
chartered outside it either by the Allied Governments or their
nationals, and partly because the vessels so obtained were not
utilized upon the basis of any common plan or siu-vey. Shortly
before this meeting of the Council, a definite agreement had been
arrived at between the Governments of France, Italy, and Great
Britain which provided that in future all time-charters of neutral
steamers would be made under the direction of the Inter-Allied
Chartering Conunittee acting under instructions of the AlliedMari-
time Transport Council, and that the employment of the tonnage
would be made in accordance with the directions of that CounciL
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SECOND MEETING OF THE COUNCIL (Apr. 1918) 171
The Council now noted this figreement, accepted the responsi-
bility entrusted to them, and delegated the current work to its
Executive. This decision is of interest in principle because the
tonnage so obtained constituted a real pool of tonnage under
complete Allied control. The . shipping in question, which
amounted to some 500,000 tons, was under the direct orders of the
Executive, who arranged the general plan of employment and
communicated it with more specific instructions from time to
time to the Chartering Committee. This was the only class of
tonnage in relation to which the Council and its Executive acted
with direct executive authority. Normally their task was to
secure the acceptance of a general plan of which the several parts
were executed by the different Governments controlling the
national mercantile marines.
Belgian Relief
A further urgent question was dealt with at the same meeting
of the Council, the provision of Allied tonnage for Belgian relief.
The reader will be familiar with the general arrangement imder
which reUef was afforded to the inhabitants of Belgium and
North France during the German occupation. The feeding
of this population was, in accordance with ordinary international
law, a responsibility of the Grerman Government. It had become
apparent in the war, however, that particularly when Germany's
own supplies were reduced to the level of bare subsistence by the
blockade, the Belgian population would inevitably suffer the most
severe hardship if they were depend^it only upon the supplies
allowed them by the German authorities. A Belgian rehef organiza-
tion had therefore been formed to purchase food supplies with
charitable contributions and to distribute them in Belgium under
American control. The Allies were induced to make the necessary
relaxation in their blockade by their desire to relieve the bard*
ships of the Belgian population. The German Government, too,
had an obvious interest in consenting, as it gave them some relief
from a responsibiUty which must have meant a reduction in their
own supplies. They, therefore, allowed the distribution of the food
and also undertook to give immunity from submarine destruction
to the vessels employed in its transport. During 1916 and the
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172 ALLIED CONTROL
greater part of 1917 sea transport had been arranged by the
Belgian Belief Commission without very great difficulty. THiey
had at their disposal about 134,000 tons d.w. of Belgian tonnage,
a number of American vessels, and in addition they had been able
to charter neutrals. By the beginning of 1918, however, three
factors had operated to make their position serious. In the first
place, the Belgian tonnage had been reduced by some marine
losses (and indeed by some war losses in spite of the general
immunity) to about 110,000 tons d.w. In the second place, the
American Government had annoimced that in view of its own
requirements it would have to withdraw the American vessels
previously employed in this service. More important than either
of these factors, however, was the practically complete control of
neutral shipping now exercised by the Allied Governments. There
was no longer any neutral tonnage in the free market of the world
which either the BeUef Commission or any other charterer could
obtain.
At the Paris Conference of December 1917 the follo¥ang
resolution had indeed been passed :
Las Allies d^clarent placer en priority de tous leurs approvisionnements
le ravitaillement des populations beiges et fran9aises envahies, sur la base
du programme de la C.R.B. tel qu'il a it6 pr£cis6 au cours des conferences
tenues k Londres entre la C.R.B. et le Gouvemement anglais. Us garan-
tissent le tonnage n^cessaire k rex6cution de ce programme, compte tenu
des navires que la C.R.B. a pr6sentement & sa disposition et de ceux
qu'elle pourrait se procurer dans Tavenir, soit directement, soit avec le
concours des (rouvernements allies.
A general resolution of this kind, however, by a conference
which as such had no executive control over shipping, and which
had at that time no organization to which the responsibility for
giving effect to it could be entrusted, was obviously of very little
use. The several Governments alone had actual control over their
ships. None of these had accepted any specific responsibility for
the provision of tonnage for Belgian reUef or had assented to any
general plan for sharing that responsibility.
Four months after the resolution had been passed therefore
the operation of the above causes had brought the whole Belgian
relief arrangements to a most critical situation. The civil popula-
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SECOND MEETING OF THE COUNCIL (Apr. 1918) 178
tion of the occupied territories of northern France and Belgium
amounted to about 9,600,000. Normally Belgium had imported
two-thirds of her food supply and northern France a considerable
proportion. In 1918 the' population of northern France and the
miUtary zone of the Etapes in Belgium were dependent almost
entirely upon imported foodstuffs. In the remaining territory
under occupation with a population of some 6,000,000 people, pro-
duction had diminished tlu'ough lack of fertilizers, &c., to about
40 per cent. In these circumstances the Commission estimated
their needs at about 120,000 gross tons of cargo a month, and con-
sidered that for the transport of this quantity they would need
additional assistance beyond the reduced tonnage they now
controlled of about 254,300 tons d.w. The Council, after a pro-
longed consideration of the question, arrived at the following
decisions :
The Allied Maritime Transport Council decides that all the articles
necessary for the revictualling of the occupied districts in Belgium and
northern France shall be included in the programme of the Wheat Exe-
cutive if that body consents, and shall be given the priority promised to
them by the resolution of the Allied Conference of December 1917,
The C.R.B. should carry out the greatest amount of the necessary
transportation possible with its own tonnage and that of the Belgian
Government. Any further tonnage necessary will be allocated by the
Wheat Executive from the tonnage provided by the Associated Govern-
ments. The permanent organization of the Transport Council is directed
to arrange for such further tonnage as is necessary in order to assure the
carrying out of this decision, subject to the assent of the Associated
Governments.
These decisions imposed a task on the Executive which proved
to be one of great difficulty, but it was ultimately executed with
success, and the Belgian supplies were maintained throughout the
year with a very small margin of deficiency.
American Transport
By this time the first preliminary warning had been received of
what was later to prove the most serious new factor in the whole
shipping position of this year — ^the requirements of the increased
American Army. We have seen that when the Allied Maritime
Transport Council was decided upon in December 1917, it was
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174 ALLIED CONTROL
anticipated that America would be able, after meeting her own
needs, to supply a considerable amount of tonnage to supplement
the deficiencies of European imports. One of the main reasons
indeed for founding the Council was the anticipation that in future
two coimtries instead of one would be supplying tonnage to France
and Italy ; which would have made a common Allied plan an
absolute necessity if confusion of every kind were to be avoided.
This expectation was well founded oiuthe basis of the military
programme then contemplated, which provided for the gradual
transport to Franiee of an army which would amount to
1,000,000 men all told by the end of 1918. The German military
effort, however, of March 1918, entirely reversed the situation.
The great American mihtary effort by which 2,000,000 men
were s^it to France before the autumn is a matter of history. The
extra strain, the transport of the men and still more of the supplies
to maintain them, strained the AUies' shipping reserves to the
utmost. They could now look for no new assistance for their
own imports from America ; ultimately they had indeed to pro-
vide tonnage in aid of America herself. This situation had not
matured in April, but the Council had before it a warning fore-
shadowing the more serious difficulty that was to be faced later,
that America's military needs could barely be met by the use of all
the tonnage either actually or prospectively under her control.
It was thus in circumstances of extreme gravity that the Coimcil
terminated its second meeting, fully reaUzing that the task of
putting into effect the decisions indicated above, which they now
entrusted to the Executive, would prove one of great difficulty.
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CHAPTER VI
THE NEW INSTRUMENT OF ALLIED CONTROL
Limits of the Council's Power and Authority. Constitution of Council.
Constitution of Permanent Organization (The Allied Maritime Transport Exe-
cutive). The National and International fimctions of the Members of the
Council and Executive. Personal and Official Relations. The linking together
of the National Administrations. The Programme Committees. The Food and
Munitions Councils. The use of Statistics. Their limitations. Nature of the
Authority of the Allied Organization.
The new organization thus established was built up gradually
during the next six months, working as it grew and growing with
the developing necessities of its work. It was indeed still in course
of development, though complete in its main structure, when the
Armistice was signed*
It wiil be convenient to describe this organization in its final
form, with incidental indications as to the stages of its growth. It
is important to remember, however, that much, indeed most, of its
work was accomplished while the machine was still incomplete.
The centre of gravity shifted slowly from the national towards the
international administration, and perhaps never in fact reached
a point beyond midway* The international machine was most
fully operative in the case of the purchase, distribution, and alloca-
tion of wheat, and least operative in the case of certain raw
materials such as wool. Between these two extremes there was
every variety of intermediate stage ; and the imnunerable
reactions and n^otiations and compromises between the earlier
national methods and the new international ones make it di£Bcult
to determine exactly where, in any particular case, the effective
centre of authority was to be found. In general it may be said that
at the point of executive action the machine was always the
national one, and the national principle predominated more and
more as this point was approached. But national decisions were
more and more affected and determined by the comprehensive
surveys and recommendations of the international bodies.
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176 ALLIED CONTROL
It must foe rememfoered, too, that America's association with
the organization was always somewhat tentative and provisionaL
The part taken by representatives in the Allied work was through-
out considerable. For many obvious reasons, however, they had
a less direct and decisive influence in their national administration
than their colleagues. Before the Armistice, indeed, America
had definitely and completely associated herself with the Council
and her representatives had begun to secure drastic American
action in conformity with the central Allied arrangements. The
Armistice was signed, however, before the full application of the
international principle was achieved. The real and crucial test
would have come, if the war had continued, in tiie spring of 1919.
We have seen too that the executive control of national ship-
ping remained with the national Governments, the only tonnage
under direct Allied orders being some 500,000 tons of chartered
neutral ships. The whole Allied organization must foe con-
ceived as influencing the poKcy of the nationcd Crovemments,
co-ordinating their action, and supplementing the deficiencies
in their resources. The supply arrangements of the different
countries continued to foe carried out in their infinite detail foy the
national executive departments. It was only at the point at
which economy could foe effected foy co-operation, or the deficien-
cies of one country met foy assistance from another, that the Allied
organization foecame involved. And even then its action con-
sisted in influencing the national Governments to co-operate and
assist, and not in the direct provision of assistance within its own
competence.
Constitution of Council and Executive
The Allied Maritime Transport Council consisted of two
British Ministers (the Under Secretary of State for Foreign
Affairs and the Shipping Controller), two French Ministers (the
Ministers of Commerce and Munitions), two Italian Ministers
(the Food Controller and the Minister of Transport), and a Del^ate
from the United States (formerly the Vice-Chairman of the
American Shipping Board) with whom was ultimately associated
as second Del^ate the American memfoer of the Executive.
These memfoers met in formal session as the Council four
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THE NEW INSTRUMENT OF ALLIED CONTROL 177
times before the Annistice — in March, in April, in August, and in
October. Each of them, however, was represented for current
work by a staff of officials resident in London and together
forming the permanent staff of the Council.
This permanent organization worked in Lancaster House
(the London Museum) in four Nationcd Divisions, of which the
American was directly responsible to the American Delegate, who
worked in the same building. The remaining three were under
the control of officials responsible to the other national members
of the Council who continued to be mainly occupied in the work
of their respective departments in their own countries. In the
case of Great Britain there was naturally no very clear line
between the British officials in the British Division of the Allied
oiganization and those in the purely British depariment of the
adjacent Ministry of Shipping.
The head of each of these National Divisions, with his staff,
was primarily responsible for considering the requirements of his
own country and the relation of any question brought up for
Allied discussion to the policy of his country ; and in carrying
out this part of its work each Division was a separate Division
mth its own confidential correspondence and separate communis
cation with its Government.
The Allied Maritime Transport Executive
The whole organization was, however, welded into one, and
the current adjustments of policy and action effected, by the
formation of the AUied Maritime Transport Executive, composed
of the heads of the French, Italian, and British Divisions together
with the second American Del^ate, the British member being at
once Chairman of the Executive and Secretary of the Council.
This Executive met frequently, formally or informally, as the
work required, and in the long intervals between the Council
meetings was the instrument through which liaison between
the (jovemments was secured on all shipping questions.
Each of its members was in daily contact with his own Ministers
and departments (by telephone to Prance, by telegram to Italy,
by cable to America, and by personal communication in London);
U69.83
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178 ALUED CONTROL
and with his Allied colleagues on the Executive either in formal
meetings or by informal personal visits.
To the national departments the member of the Executive
always represented the Allied point of view ; he was always
urging his o¥ni country to abate its demands or increase its
assistance. To his Allied colleagues, on the other hand, he was
always representing his own country's point of view, urging
its needs and trying to influence the other countries' action in the
direction of its policy.
The success of this crucid and difficult work depended very
largely on the personal position and influence of the members of
the Executive ; on their relations with their national departments
and with each other.
We have seen that the fundamental principle adopted in
appointing the members of the Council was to select, not dele-
gates, but the responsible Ministers with direct executive authority
over the departments whose action was affected. So far as was
possible for a body necessarily working continually in one capital,
a similar principle was adopted in choosing the officials who formed
the Executive. All the members both before their appointment
and dining the exercise of their new duties either occupied positions
of executive authority in their national departments or were at
least in a position to exercise direct and effective influence in them.
The French member, for example, had long worked in the closest
association with the French Minister of Commerce, and through
the Standing Committee presided over by that Minister, and
through other channels, was able to secure the necessary action by
the French supply departments. The Italian member had throu^-
out the war occupied important positions in relation to the whole
of the Italian supply needs and was also a person of great authority
both with his Ministers on the Council and in the Italian supply
departments. The British member was, and continued to be.
Director of Ship Requisitioning in the Ministry of Shipping and was,
of course, in a better position than his colleagues to keep in touch
with his Ministers because of the situation of the organization in
London. The American member was the second American Del^ate
on the CoundL
Scarcely less important than the relations of the members with
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THE NEW INSTRUMENT OF ALLIED CONTROL 179
their own departments were their relations with each other. The
work could never have been successfuUyachieved if daily association
had not developed mutual confidence. The position of members of
an international committee with a dual personal capacity, interna-
tional in relation to their own country, national in relation to other
countries, is one of great delicacy. They necessarily receive
information from their departments (they are useless if they do
not) with regard to pplicy while still in the process of formation.
It is a problem of the utmost difficulty to know how much of this
can properly be communicated to their Allied colleagues. So far
as the AUies are regarded as competitors with divergent interests
any such communication weakens the bargaining position of one's
own country. But so far as they are regarded as partners whose
common interests are more important than any conflict of claims,
such communications may often be essential. One of the most
vital lessons of international administration is that, in any difficult
and complicated subject-matter, policy is adjusted much more
easily if it is adjusted in the actual process of formation. If each
one of four separate countries considers a problem with interna-
tional reactions from its own point of view, develops a national
policy, begins to give it expression in administrative arrangements,
fortifies it with Ministerial decisions and Cabinet authority,
adjustment will prove almost impossible. Four rigid and
developed policies will confront each other. Those who represent
them will be committed to them by the national authority already
given to them, by the administrative arrangements already made,
and by a feeling that a point of national pride is involved in main-
taining them unchanged. If a settlement is arrived at in these
circumstances it will probably be after a contest in which the
determining factor will be the bargaining strength of the disputants
rather than the intrinsic merits of the case. But if the national
points of view can be explained while they are still developing,
if policies can be brought into contact while they are still plastic
and still unformed, agreement will be easier and probably better.
Given the proper personal relations, many things can be explained
which would never be put on paper or stated in a formal meeting ;
the limits of concession can be explored and the several national
policies formed and fixed in the first instance within them instead
N2
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180 ALLIED CONTROL
of beyond them. But the delicacy of such work, and the difficulty
of the questions of loyalty and good faith involved, are obvious.
It is only possible at all under conditions of personal confidence and
long personal association* Fortunately the members of the Trans-
port Executive all felt this confidence in each other, and the
relations of colleagues in work developed in time into those of
personal friendship.
The linking together of the national divisions into an Allied
instrument under the Executive was extended by the formation
of subordinate committees, responsible to the Executive, for
Tonnage, for Imports, and for Statistics. The members of the
different national divisions who were specially concerned with
each of these three branches of the work met in conmiittees for
agreement in the details of their current work and referred to the
Executive on questions of principle.
The organization as described so far has been essentially
' international ' in principle, each of title persons engaged in it
having a dual capacity, and the whole being concerned with the
adjustments of national action or policies which started by being
divergent.
When such questions had been resolved, however, there was
a certain amount of work to be done of a purely administrative
or secretariat character. The correspondence of the Council
had to be carried on and its information collected. For this
purpose a ' non-national ' secretariat was formed responsible to the
Executive. Each of the members of this secretariat, who were in
fact of all the four nationaUties, was required to divest himself
of any national point of view and to give effect to any agreed
pohcy with an absolute impartiaUty ; and in view of the character
of its duties the secretariat was organized under a secretary, on
ordinary administrative principles, and not imder a committee.
Within this ' non-national ' part of the organization was
incorporated the Shipping InteUigence Section originally estab-
Ushed in the Ministry of Shipping but now transferred to Lancaster
House and made equally accessible to all four countries.
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THE NEW INSTRUMENT OF ALLIED CONTROL 181
The Pbogbamme Committees
So far we have been describing the internal organization
of the Council and its Executive. This, however, was only one,
though the central part of the new Allied supply system which
gradually linked the various Control systems of the several
countries together.
We have seen that throughout the war the shipping authorities
were anxious to transfer the responsibility for selecting between
the competing demands of the supply departments to an authority
representing those departments themselves. In the several
countries this transfer had been gradually effected by the establish-
ment of such bodies as the Tonnage Priority and Milner Com-
mittees in England and the Standing Committee on Imports in
France, and at its April meeting the Transport Council had
decided to internationalize this system by the extension of Pro-
gramme Committees on the model of the Wheat Executive.
In the sphere of supply, as of shipping, it must be remembered
that the basis^ and the indispensable condition, of the whole
system were the national systems of control in Great Britain,
France, Italy, and America. The work was now, however, co-
ordinated and infused with an international spirit by the forma-
tion of the new Programme Committees.
So far as geographical considerations allowed, the members
of these committees were chosen on the same principle as those
of the Transport Coimcil and Executive, that is, they were the
actual ofi&cials who exercised, and continued to exercise, direct
executive authority in their own national departments.
In Great Britain (where the arrangement was easy, as the head-
quarters of the Allied organization were in London) the repre-
sentatives were all chosen on this principle. In the case of France,
and to a less extent Italy, the same end was achieved by arranging
meetings from time to time in France, by fecial visits, by taking
advantage of visits of AlUed ofi&cials to London for other purposes,
by an interchange of membership between the Committees and the
national departments, as well by the appointment as permanent
representatives of persons who had been personally associated
with the national controls. Special telegraph and telephone lines
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182 ALLIED CONTROL
to Paris assisted the liaison. In the case of America, where the
distance was more serious, the contact in current business was
necessarily less complete, but was assisted by pers<mal relations
and by occasional visits. The system was elastic, but throughout
it was based on the essential principle that expert should deal
with expert on the basis of his special knowledge ; he was first
an expert in his particular commodity and second only a national
representative.
The Progranune Committees varied a great deal in origin, in
constitution, and in powers. Some of them, of which the Wheat
Executive was the most important, had been established before
the A.M.T.C. Many of them had other duties than that of pre-
paring and revising programmes in relation to shipping. Some
had actucd executive powers of purchase, &c. The most important
of them appUed to the War Purchase and Finance Council for
finance, as they appUed to the A.M.T.C. for their ships. And the
practical importance of their work varied both with the kind of
the conunodity and with the personal character and position of
their members. The committees as such were not the subordinate
organs of the A.M.T.C. and its Executive. But the development
of the committee system over the whole range of supplies was
decided upon and carried through upon the initiative of the
A.M.T.C., which throughout occupied a central position and
co-ordinated and guided the whole organization. This dominant
position was gradually acquired through the simple fact that the
work of all the committees, as of the supply departments which
they represented, was dependent upon shipping and more upon
shipping than upon any other factor.
The Munitions and Food Councils
In the course of 1918 it was found convenient to group a
number of the committees under a few central authorities, by
a process closely analogous to the grouping of the nationcd supply
departments for national purposes under the Cabinet Committee
in England and the Standing Committee on Imports presided over
by the Minister of Commerce in France. Two great Councils ware
formed for this purpose — the Inter- AlUed Munitions Council, cover-
ing all the raw materials whose most important use was for the
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THE NEW INSTRUMENT OF ALLIED CONTROL 188
manufacture of munitions themselves, and the Food Council,
similarly covering all articles of food. A third Council to co*
ordinate Programme Committees dealing with other raw materials
had been projected, but was never in fact brought into existence
before the Armistice. These two big Councils were ministerial
bodies of an equal status with the Transport Council itself, the
latter Council gradually acquiring a leading position not through
the difference in rank or status of its constituent members, but
through its control of shipping.
The Programme Committees were established gradually, and
only got into working order slowly and unequally. In the
meantime, of coiu-se, so far as any imported commodity was not
covered by a committee or so far as the committee was not
fully working, the arrangements for supply had to be n^otiated
direct with the shipping authorities, as under the old system.
This indeed continued throughout to be the main method as
regards some of the supplies (the raw materials for civilian
purposes and some others). Ultimately the whole range of
imported commodities was covered by the following Committees :
1. Wool. 6. Paper.
2. Cotton. 7. Timber.
3. Flax, Hemp, and Jute. 8. Petroleum.
4. Hides and Leather. 9. Coal and Coke.
5. Tobacco.
Food Council:
10. Cereals. 12. Sugar.
11. Oil Seeds. 13. Meats and Fats.
Munitions Council :
14. Nitrates. 18. Non-ferrous Metals.
15. Aircraft. 19. Mechanical Transport.
16. Chemicals. 20. Steel.
17. Explosives.
We are not here concerned with the purchasing and other
functions and duties of some of the Programme Committees. So
far as shipping organization was concerned, their duty was to
frame their programmes in relation to the shipping possibilities,
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184 ALLIED CONTROL
to submit these to the Transport Council and its Executive, and
to agree and distribute the detailed reductions necessitated by
the general shortage of tonnage. Sometimes a general principle
would be imposed. For example, the Council approved in August
the principle that recorded consumption of raw materials in the
previous year should be taken as constituting the maximum for
the ensuing year ; and in October the principle that in view of
the prospect of an improved tonnage position in the summer of
1919 all supply departanents should make their arrangements on
the basis of running stocks down so that by August they would
be only approximately suflficient for actual distribution. Some-
times a criterion would be given to the Committees by which they
could test their demands. They were told in September, for
example, that a reduction of 5,000 tons in a supply programme
meant that 1,000 additional American soldiers could be brought
to France. Sometimes comprehensive decisions would be taken
by the Council covering a whole group of commodities under
a grouped series of Committees. The total permitted imports for
food and munitions respectively were, for instance, fixed by the
Council in October. But apart from such general principles and
decisions, a mass of detailed work of criticism, restriction, and
adjustment was carried out from day to day by negotiations
between the members of the Executive and of the Committees,
meeting usually informally and individually. The detailed pro-
cediu'e and method of negotiations will become apparent in the
later description of the work as it developed, and is furtha*
illustrated in the documents printed on pp. 301-326. It is im-
portant, however, to remember in reading the documents whidi
show the natiu-e of the negotiations, that the great bulk of the
current work was carried on personally and informally, formal
correspondence only passing when this simpler and more ex-
peditious method had failed and when it was necessary to define
an issue clearly for superior decision. In general the Executive
of the Council bore the same relation to the Programme Com-
mittees as the Transport Council itself to the Munitions and Food
Councils, that is to say, it acquired a leading position among than
and a determining influence in the formation and execution of
their programmes by its control of shipping.
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THE NEW INSTRUMENT OF ALLIED CONTROL 185
When the Allied system was in complete operation, there was
one further development in the arrangements. Members 6f a par-
ticular Programme Conunittee, e. g. the Wheat Executive, were
associated with shipping representatives in a Freight Committee.
This Committee then arranged the detailed allocations of ships,
and the instructions as to where they were to load and discharge.
These joint Committees, formed first for wheat, then for all food,
and towards the end for mimitions, discharged the important
xesponsibiHty of securing practical effect to the general arrange-
ments made by the Allied supply authorities (the Wheat Execu-
tive, &c,) and the general poKcy approved by the AUied Shipping
Authority. A great part of the daily business fell within their com-
petence, and the success of the system in its most successful sphere
was largely due to their work.
The reader must conceive the whole national mechanism of
control, of restriction, of allocation of tonnage described in Part II
of this book as operating simultaneously with thie Allied machinery.
The restriction within the supply departments themselves, the
Tonnage Committee, the Tonnage Priority Committee, the
Cabinet Committees, the further pressure exercised by those
engaged in the actual allocation of ships — ^all continued in the
several countries. But these national systems were linked together
and formed, through the Programme Conunittees and the Trans-
port Executive, through the Food and Munitions Councils and
the Transport Council, a new organization by means of which the
national process of restriction was repeated and supplemented on
an international basis.
The Use of Statistics
Throughout the whole of this intricate system of competitive
demands the basis of discussion was statistical information. Every
supply department, every member of each Programme Committee,
was fortified with elaborate calculations and detailed figures of
the requirements, the production, the consumption, and the stocks
of the particular commodity with which it was concerned. And
these were confronted with the corresponding statistics both for
other competing commodities and for shipping and its transport-
ing capacity.
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186 ALLIED CONTROL
It must not be imagined, however, that the cdlection of
statistical information in itself solved the problem or indeed went
any very considerable way towards solving it. Statistics were at
the best only an instirument, often a very imperfect instrument,
for the real work. In the first place, it was only within a very
narrow range that they could be reUed upon as accurate. Statistics
of actual shipping in existence or under the control of the differ^it
AUies were indeed precise and exact. So, normally, were those of
actual imports. To cdnvert the ships, however, into terms of
importing capacity during a future period involved estimates in
which many factors of uncertainty were included (loading and
dispatching delays, convoy arrangements, &c.). Among the more
important statistics, those of stocks were almost always in*
accurate. It was sometimes possible to get acciu'ate particulars
of stocks held in official hands, but stocks in private hands or on
producing farms were always subject to the widest mai^in of
error. So, too, were estimates of production, as distinct from
import, and of consumption. The very basis upon which the
balancing of one country's need with another had to proceed was
thus a shifting and uncertain one. But even if all the statistics
had been certain, precise, and accurate, the problem would not
have been solved. An estimate as to the relative strength and
character of the needs of the different countries went in its nature
beyond the sphere of any precise information, depending upon
the habits and morale of the populations, on poUtical factors, and
many other considerations. It must be remembered, too, that
throughout the information available varied with the varying
personnel of the different national administrations and depart-
ments. Every person harassed in his daily work had a natural
and inevitable desire to secure a httle margin. So all the way up
the organization ; within each branch control ; within each laiger
department grouping and directing the smaller ones ; within each
Programme Committee where experts criticized each other's
demands ; within the large Allied Councils of supply which
exercised a superior criticism and supervision ; and finally in the
bodies which controlled the allocation of shipping — ^there wa^
a constant process of judging and estimating on the basis not
merely of statistics but of personal and practical experience.
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THE NEW INSTRUMENT OF AIUED CONTROL 187
In the last resort, and in spite of all the intermediary criti-
cisms and prunings by the supply experts, further reductions
were always still required when the programmes and the demands
for ships came to the shipping organization. Little by little
those engaged in allotting ships acquired something of an in-
stinctive judgment, corrected or confirmed by statistical in-
formation, but based largely upon the practical experience of
the past. They became able to discount the d^nands with
some real perception of the essential need, and the point to
which it was essential. And indeed, as the war developed the
most vital needs seemed almost to place themselves in their due
prominence, and thrust others out of their way, by their own
force and voUtion. Before the war plenty and luxury concealed
the anatomy of the economic system as the skeleton of the human
frame is hidden in a well-nourished body. The years of war
brought leanness, spareness, and emaciation, till at last the bones
thrust through, and the essential framework of the economic
structure was revealed.
Note as to the Natuee of -the Authoeity of the
Allied Oegaxization
It is necessary, though difficult, to describe with precision the
nature of the authority of this AUied organization and the prin-
ciples upon which it was based.
The Council, as we have seen, had no direct executive power
except over the pool of neutral ships entrusted to it during the
war and over the en^ny ships allocated under its direction during
the Armistice. For the rest of its work it was in principle advisory
only. The executive power remained with the several Govern-
ments for directing its own shipping and for arranging its own
supplies. The power of the Allied organization was dependent
upon consent, was exercised through persuasion, and was based
upon and developed by the confidence which it inspired. It is
indeed evident that no other basis would have been possible in
the circumstances. We have seen that an International Board
with complete executive power over a conunon pool of Allied
tonnage was proposed at one stage at the Paris Conference and
in the negotiations preceding it, but had been rejected, and rightly
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188 ALIJED CONTROL
rejected. If such a board had had power to act only by a unani-
mous vote, its power would in fact have been no greater than that
of a body advisory in principle. Each delegate would have
inevitably made a reserve or given an adverse vote against any
proposed decision adversely affecting his country's interests if he
considered that his country's assent would not be given to it. If,
on the other hand, the Board had had power to act by a majority
vote, the whole system would inevitably have been broken
when any one Government considered the decision unjust and
did not feel sufficient confidence in the AUied organization to
accept its verdict. The organization could have only gone on so
far as it acted within the limits of the assent which its own prestige
and reputation could acquire from the several Governments.
And its reputation and therefore its power would in fact have been
seriously prejudiced from the beginning by its mere assumption
of a nominally overriding executive authority. With this as
the fundamental condition of Allied action, an Allied organiza*
tion based upon consent, and advisory in principle and in name,
conciliated its critics by the modesty of its pretensions, and was
enabled to develop its real influence. Its power to influence
executive action grew automatically with its reputation and with
the necessities of the situation.
Its authority was, however, immensely increased by the
principle upon which its personnel was chosen. It became almost
an academic question to ask whether a unanimous vote of the
Council could determine the allocation of ships. In principle, no.
But if the British Shipping Controller consented as a member of
the Council it necessarily happened that in his national capacity
as head of the British Ministry of Shipping he would give the
requisite orders. It remained true, of course, that no majority
vote of his colleagues could force him to give that assent. That
was inherent in the position. The whole organization, however^
was designed to seciu-e that each Minister, and within his sphere
each official, should in the development of policy and in the
execution of current work be in contact with the opinions, and be
influenced by the point of view, of the corresponding Minister and
officials in the other Allied countries, and should thus act with
knowledge and with sympathy.
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CHAPTER VII
WORK OF THE EXECUTIVE, MAY TILL JULY 1918
The four months' interval in the Council's Meetings. The Executive's r6le
of Liaison. Italian and French Coal Supplies. Belgian Relief. Wheat Supplies.
American Military Programme. Organization of Programme Committees. The
General Tonnage Position.
The next four months put a severe strain upon the new Allied
machine. The extreme gravity of the miUtary situation made it
necessary for the respective Ministers who constituted the Trans-
port Council to remain in their own countries, and during the
gravest period of the war and of the shipping position no meeting
of the Coimcil was possible between April 25 and August 29. At
the same time the military effort of the Allies continued to be
dependent upon its supplies, its supplies to be dependent upon
a less and less adequate sea transport. Decisions of grave im-
portance in the allocation of tonnage were therefore constantly
required. To some extent the result was to throw a greater
responsibiUty directly upon the members of the Executive. Much
of the action, however, which required to be taken jointly by the
Allies was such as to necessitate decisions by the Governments
themselves. The ability of the organization therefore to act as
an intermediary between the different Governments was severely
tested. It proved adequate to the task. It was found possible
to secure the necessary co-ordination and decisions partly through
the liaison work of the members of the Executive, and partly
through telephonic and telegraphic arrangements, supplemented
in certain cases by special visits. The permanent organization in
London was, of course, enabled to keep in close touch throughout
with the British Ministers, the British Shipping Controller visited
the French Ministers in Paris with the British member of the
Executive, and the American member of the Executive made
a special visit to Washington. By these and similar methods the
necessary consultation and agreement were in practice secured
without a formal meeting of the Council.
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190 ALUED CONTROL
CUEEENT WOEK
In the meantime the definite tasks allotted to the Executive
were successfully carried out.
In the four months, from the middle of April to the middle of
August, 2,330,000 tons of coal were dispatched to Italy, including
1,440,000 tons from the United Kingdom, sent partly by the long
sea route and partly by the shorter sea route via Blaye, and
890,000 tons of French coal.
The railway shipments from or through France were con-
siderably below the quantities originally contemplated. This
resulted mainly from a shortage of railway trucks, and some
difficulty was also experienced in securing coastal tonnage for
transport of coal railed across France on the short sea route from
MarseiUes and Cette to Genoa. The net deficiency, however, was
reduced to 67,000 tons through shipments of British coal on the
long sea route, considerably in excess of the quantities first
arranged.
These shipments would indeed have completely made up the
balance but for difficulties in obtaining the coal itself in May
and June.
Drafts for the Army were the paramount necessity of the
moment, and a large additional contingent of miners had been
called up from South Wales and other mining districts. The
effect of compulsory enrolment, however, was considerably in-
creased by the desire of the miners themselves to join the Army.
As at every period of grave military disaster in the war, the
inmiediate effect of the reverses in France was a rush to the
colours. For every man called up under the recruiting scheme,
which attempted to balance the needs of coal against the needs
for soldiers, one or two further miners insisted upon leaving their
work and offering th^nselves to the Army.
In June it became necessary to establish a special strat^c
reserve in Italy of 160,000 tons, outside the monthly supply of
600,000 tons. By the middle of August 140,000 tons of this had
been dispatched, so that in spite of the difficulties of May and
Jime, the total shipments somewhat exceeded the total originally
contemplated of 600,000 tons a month.
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WORK OF THE EXECUTIVE, May-July 1918 191
Meantime the French coal programme was in serious diffi-
culties. Chapter V has described the general position and the
nature of the new responsibiUty entrusted to the Executive,
They fully recognized the vital importance of French coal
requirements. Unfortunately, the provision of ships was not
enough. The receiving capacity of the French ports was reduced
by the inabiUty of the railways to clear them. Wagons had been
drawn off for military needs, and the position was made worse
by the dislocation of inland water navigation caused by the same
niilitary operations. Partly through these causes and partly
through the difficulties of supply in Great Britain, the coal shipped
to France only amounted to 1,496,000 tons in April, 1,530,000 in
May, 1,260,000 in June, and 1,489,000 in July. The Executive,
however, did everything possible within their own sphere — ^the
provision of ships. From the first moment of the German offensive
in March till the end of the siunmer sufficient shipping was sup-
plied, at any cost and with whatever difficulty, to lift practically
every ton of coal that could be secured in Great Britain and
received in France.
The Executive's Third Task
The provision of tonnage for Belgian relief was also put into
execution. The Wheat Executive examined and endorsed the
programme of supplies proposed by the Relief Commission, and
agreed with them as to the sources from which they could be drawn.
The provision of the tonnage, which was the task of the Transport
Executive, presented great difficulties. Thero was indeed general
agreement as to the method by which the problem ought ulti-
mately to be solved. The Allies were now beginning to acquire
a considerable quantity of neutral tonnage on the specific con-
dition that it should not be employed within the war zone. They
had, for example, concluded an agreement in April, under whidi
they expected to obtain nearly S00,000 tons d.w. of Swedish
tonnage, subject to this restriction. As Belgian reUef ships were
immune under German guarantee from submarine risks, this
tonnage was obviously the most suitable for this service. No
substimtial quantity of it could, however, be expected for a con-
siderable time, and the Belgian needs were urgent and critical.
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192 AIXIED CONTROL
It was estimated that the intermediate period could be tided over
if twenty-six additional cargoes beyond what the Belgian relief
vessels could themselves carry were provided, and that some ten
of these cargoes might be obtained by occasional chartering of
neutral vessels. An agreement was successfully arranged between
the American and British Governments under which each of the
two countries €tgreed to transport eight of the sixteen cargoes,
and to give Belgian relief the first call upon the Swedish tonnage
as soon as it was obtained. These arrangements were supple-
mented by the immediate shipment from England of about
10,000 tons of EngUsh Government flour and about 14,000 tons
of miscellaneous foodstuffs belonging to the Belgian Belief. In
the three months June, July, and August, Belgian Relief imported
about 540,000 tons, as compared with the full progranune of
360,000 (120,000 tons a month). The additional tonnage required
was provided in practically equal shares by the United States
and Great Britain — 57,606 by the first, and 59,815 by the second.
In the meantime the cereal supplies of France, Italy, and Great
Britain were being maintained on the basis of a conunon Allied
programme and in accordance with the system explained on
p. 158, under which Great Britain in effect accepted the responsi-
bility for supplementing the deficiencies in the tonnage of the
other two coimtries. The quantities suppUed under this system
by diversions of ships under British control (not includii^ the
cereals supplied in British ships under French or Italian control)
during these months were : April, 109,000 tons to France, 92,000
tons to Italy ; May, 75,000 tons to France, ^7,000 tons to Italy ;
June, 104,000 tons to France, 158,000 tons to Italy; July,
163,000 tons to France, 78,000 tons to Italy ; making a total of
approximately 1,000,000 tons suppUed under the system.
It was not possible to deal with other supplies on an equally
systematic basis. Too little was known of th^n. It was evident,
however, that both Italy and France needed emergency assist-
ance, and both obtained it. The British liner service from
America to Italy was increased so as to add 50,000 tons a month
to her imports of munitions and raw materials. Italy was also
allowed to devote to similar work 75,000 tons of her shipping
previously engaged in carrying cereals ; and extra British tonnage
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WORK OF THE EXECUTIVE, May-July 1918 198
was automatically supplied under the system described to meet
the resultii^ deficiency. Special shipments of about 70,000 tons
of munitions from the United Kingdom were also arranged.
During the same four months France, whose needs were serious
but less critical, received extra tonnage for the shipment of about
60,000 tons of railway wagons, locomotives, and various war
materials from America.
During the same period the new system of directing the
neutral pool tonnage was put into operation. A general plan,
which is described in detail on p. 296, was arranged and
agreed. The main lines of this plan were that vessels up to
1^700 tons d.w. were to be allotted to the French coal trade;
vessels between 1,700 and 3,000 tons were to be sent with coal ta
the Bay, and then to return with ore from Spain. Vessels between
3,000 and 4,500 tons were to take coal to Italy, and also return
with Spanish ore ; while vessels over 4,500 tons were to be sent
first with coal to Italy and then to load cereals in America for
transport to the Eiu-opean Allies under the Wheat Executive.
During the four months May to August, 176 vessels were allotted
in accordance with this general plan.
In the meantime the increased American mihtaiy programme
was having consequences of the first importance. The provision
of passenger ships for the transport of the troops was not arranged,
except to an unimportant extent, through the Transport Executive,
but by direct negotiations in America between representatives of
the American and British Grovemments. The numbers transported
under these arrangements soon reached very large dimensions5
637,879 American soldiers being embarked in the three months
April, May, and June, 330,956. of them in British vessels, and
a further 305,000 (188,000 in British vessels) in the month of July.
The only work of the Executive consisted in some negotiations
resulting in a certain number of Italian and French passenger
vessels being included in the trooping programme.
The task of the Executive was not to find troop ships for the
American programme but to deal with the effect of that pro-
gramme on the general transportation of supplies. The fitting of
the vessels, which were nearly aU of a passenger-cargo type, meant
the loss of considerable cargo-carrying space, approximately 2 tons
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194 ALUED CONTROL
of cargo being lost for every man transported. This at once meant
a loss of about 1,000,000 tons of imports through the allocation of
British and Allied tonnage to American trooping work. The
more serious problem of transporting the supplies of the American
soldiers developed somewhat later, since the soldiers themselves
were hurried over at once with relatively few stores, and were
helped with Allied supplies when they reached Europe. A pre-
liminary examination was made of tibds more difficult problem
during this period, but was not seriously dealt with or brought
into relation with the main supply arrangements until the later
period described in the next chapter.
Meantime the organization of the Programme Committees to
cover the whole range of imported supplies was developed in
accordance with the decision of the Council in April, and the new
Committees, as well as those which had been in existence for some
time, began to get to work. The British Government allotted the
responsibility for appointing the British representatives, and in
general for making tiie arrangements on the British side, to the
departments responsible for the different commodities. Thus, the
War Office became responsible for wool, Q.M.G. stores, horses and
mules, hides and leather, flax, hemp and jute ; the Ministry of
Munitions, for munitions, nitrates, metal, ores, &c. ; the Board
of Trade, for cotton, paper, tobacco and timber, and, jointly
with the Ministry of Shipping, for coal and coke ; the Ministry
of Food, for the various articles of food, including cereals, meat
and fats, oil seeds and sugar. Meantime, the mimitions com-
mittees had been grouped imder an Inter- Allied Munitions Council
formed in April 1918, and the food committees under an Inter-
AUied Food Council, established after the American Food Con-
troller's visit to Europe in July.
The general shipping position at the end of this period is
perhaps best indicated by quoting the following note written in
July 1918.
Note on General Shipping Position
The following are the main features in the general tonnage position :
(a) The deficit in carrying power as compared with imports has been
reduced by the conclusion of the Swedbh Agreement in addition
to the acquisition of the Dutch tonnage (allowed for in the last
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WORK OF THE EXECUTIVE, May-July 1918 195
statement of the Council) and by some reduction in the submarine
losses as. compared with the previous estimates.
(b) As reported in detail above, very large diversions in British tonnage
have been made for the conveyance of cereals to France and
Italy, for railway material and munitions to those two countries,
and at the same time the fitting of vessels for American troops,
and the use of cargo space for this purpose have made a serious
reduction in ipiporting capacity. As a consequence mainly of
these causes the imports into the United Kingdom were 700,000
tons less in June than in May.
(c) The most important new factor in the prospective AUied tonnage
position is the immense increase in the American Military Pro-
gramme recently required by the Supreme War Council and
consented to by the American Government.
It may be said generally that the execution of this programme, so far
as the carriage of personnel is concerned, can be effected by the con-
tinuance of the arrangements already made without further increctsing
the reduction in cargo-canying power. The real problem is one of the
carriage of supplies and of horses. This problem is now being investigated
and further information is awaited from America.
It may be stated provisionally, however, that the transport of full
supplies for. the full army contemplated would apparently involve the
employment of not less than 7 to 8 million tons dead weight as from the
summer of 1919, the tonnage rising gradually in the meantime from the
present 2 million tons dead weight to the above figure, and that in addition
the transport of horses would involve the employment of over 1 to IJ
million tons dead weight for a year, falling thereafter to some 800,000 tons
dead weight for replacement of wastage.
Towards the above figures, which are likely to be increased by the
transport of certain constructional material, &c., can be set (a) the supply
of material by the European Allies, whether undar the brigading system
or otherwise; and (b) the new American building, which each month goes
a long way towards meeting the additional demands of the extra soldiers
landed in France during that month.
It is understood that arrangements are being made by France and Great
Britain to supply artillery and clothing in large quantities which would
relieve the Supply Progranmie, but it cannot yet be stated to what extent*
These notes must be regarded as very provisional only and not
expressing any agreed estimate, which is not yet possible, but it was
thought necessary to attempt some indication of the scope of what is the
most important new factor in the general tonnage situation.
Apart from the uncertainties of building and construction, it is clear
that the whole tonnage situation must be regarded as very uncertain,
in view of the possible consequences, and demands upon tonnage, that
may result from the military situation.
02
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196 ALLIED CONTROL
The import programmes still show a large excess over carrying
power ; [but while] this camiot be removed until the Programme Com-
mittees have proceeded much further with their work, the information
which has already been received indicates within no very wide margin of
uncertainty the directions in which the balance is likely to be struck for
this current year 1918.
The general impression that is gathered from the documents
of this time is that the demands upon tonnage were greater in
relation to the shipping available than at any previous period,
but that the situation was more in hand. The organization of
control both of conunodities and of shipping had been developed
and improved, and was better able to deal with current emer-
gencies. The prospect for the future was relieved by the increase
in building and by the reduction in losses. The corner was turned.
Safety was in sight, though not attained.
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CHAPTER VIII
COUNCIL'S THIRD MEETING, AUGUST 1918
The Food Programme criticized. Meeting; of Council on August 29. The
Shipping Position in August. Civilian Commodities. Coal Supplies.
First Meeting of the Food Council
In July the four Food Controllers of America, Great Britain,
France, and Italy, met in a series of important conferences in
London to consider arrangements for the new cereal year.
The first result was the establishment of an Inter- Allied Food
Council with a permanent committee (the Committee of Repre-
sentatives). This new organization at once examined the food
requirements of the different countries and drew up a single
programme of supply which was presented to the Executive for
submission to the Council.
This food programme came as a great disappointment to the
shipping authorities. Amidst the great difficulties of the time,
the one factor from which they had expected relief was the con-
siderable improvement in the harvests of 1918 over those of 1917.
Faced with increased demands both for munitions and the supplies
of the American Army, they hoped that in the transport of food
at least a substantial reduction >i¥ould be possible. There would,
they hoped, be a further economy because a larger proportion
of the cereals was this year obtainable from North America, the
nearest source of supply. The Food Controllers of the different
Allied countries, however, had had a difficult and ahnost impossible
task during the winter of 1917-18. In every country there had been
shortage, in some districts the shortage had approached local star-
vation, and all the Ministers were anxious to assure themselves
against a repetition of similar troubles in the following winter. The
first programme presented by the Food Council actually requested
the importation of 4,500,000 tons more cereals for the year 1918-19
than had been imported in the year 1917-18. In spite of the
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198 ALI.IED CONTROL
economy in transport through larger shipments from America,
this would have meant the employment of more shipping than in
the previous year. This was a serious shock to the Transport
Executive. An important letter dated July 30, which is reprinted
on p. 304, after stating the genial position, urged that the Food
Council should adopt the principle of taking the total actual
consumption during the last c^eal year as setting the maximum
limit to the new programme. The Food Council replied that they
could not accept this principle which would involve a serious
danger to the morale of the civilian population. They proposed
alternatively the principle that as much tonnage for food transport
should be allowed as during the previous year. This would have
given extra food supplies to the extent to which the same shipping
could carry more cargoes because they came from a nearer source.
The Transport Executive maintained their position. A letter
written in the name of the Council on August 5 concluded by
stating that
the Transport Council will not fed justified in asking the military and
munitions authorities to reduce their demands upon tonnage (with a con-
sequent reduction of the numbers of American soldiers available for next
year's campaign) in order that such tonnage may be allocated to food as
to enable and encourage consumption upon a more generous scale than
during the past year.
The Committee of Representatives of the Food Council, with
this shipping position before them, then reconsidered their
requirements. While not formally withdrawing from their
previous position they greatly assisted the solution of the problem
by dividing their programme into two parts. The first (' Priority
tonnage ') cov^ed what they considered the absolute minimum
and amounted to 18-5 million tons; the second (^balance of
programme ') cov^ed the rest of the requirements and amounted
to 8-25 million tons, of which 3-63 million tons were ' military
oats ', i.e. oats for army horses. The documents reprinted on
pp. 304-20 both explain the subject under dispute and illustrate
the procedure of the Council and Executive in n^otiating with
the supply authorities.
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TfflRD MEETING OF THE COUNCIL (Aug. 1918) 199
Thibd Meeting of Transport Council
The Transport Council met, for its third session, in London
on August 29 and was at once confronted with the Food Council's
request. They had before them at the same time a report from
the Executive recommending that the programme should be
commenced provisionally on the basis of the quantities covered
by the ' priority ' figures only. This recommendation was accepted
by the Council with a qualification promising further reconsidera-
tion when fuller information was available. The issue was finally
determined, as will be described in the next chapter, at the fourth
and last meeting during the war of the Transport Council, in
October, but was never, of course, translated into full execution
in view of the conclusion of the Armistice in the following month.
The Shipping Position in August 1918
Before dealing, however, with this particular problem and
with the others confronting them, the Council obtained a proper
perspective for their work by examining the much more complete
statement of the whole shipping position for 1918 which the
Executive were by this date able to place before them.
World building, including American, now exceeded world losses.
During the seven months ending with July 31, 3,500,000 tons
d.w. had been lost and 3,500,000 had been built. During the last
month of July building had exceeded losses by 157,000 tons.
This apparently favourable result, however, was due solely
to the immense increase in the American building programme.
During the same seven months the rest of the world had lost over
a million tons more than they had. built, and even in the last
month of July the losses, though lower, had still exceeded building
by some 50,000 tons. The excess of American building over losses
was, on the most favourable computation, less than the amount
required for the increased demands of the American Army. It
followed that the tonnage available for the needs of the rest of
the world, and in particular for the European Allies, was still
diminishing.
As the Council met, a new cereal year, 1918-19, was just
beginning. The shipping under the control of the European
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200 ALLIED CONTROL
Allies at the begmning of this new year was about 2,000,000 tons
less than a year before. The acquisition of Dutch vessels, certain
agreements with Norway, Sweden, and Denmark, were taken as
likely to give the European Allies a net gain of about 500,000
tons. On the other hand, the carriage of American troops was
already equivalent to the loss of an equal amount (without
allowing for the transport of the supplies still to be undertaken).
The net result remained, therefore, that even if no more tonnage
were allotted to America the European Allies would have for their
needs some 2,000,000 tons less than the tonnage available a year
ago. This was equivalent to a reduced importation of some
8,000,000 tons of cargo.
The Munitions Coimcil had not at this date completed their
programme, but had sent a warning that the change in the charac-
ter of the warfare must necessarily mean an increased per capita
importation. Meantime, the only substantial prospect of relief
that had been anticipated, that resulting from the better harvests,
had been rendered doubtful by the receipt of the Food Council's
demands. The American Government, moreover, at this time
estimated that its Army supplies would need extra shipping to the
amount of 1,200,000 tons in the next few months, reducing
gradually to about 200,000 (with the increase of their own con-
struction) by February 1919. Thus, with 2,000,000 tons less of
shipping, the shipping authorities were asked to carry more food,
more munitions, and the supphes of a new army.
The position, therefore, was very grave and might have seemed
hopeless. At the same time, however, the reduction in losses by
submarine, the improvement in the convoy arrangements, the
acquisition of more neutral tonnage and its better employment,
and the supply of a larger proportion of imports from the nearer
source of America, were favourable features in the situation.
Still more important were the better knowledge and better
organization now available through the Food Council and the
various Programme Committees for arranging such reductions as
proved inevitable on a considered basis. And the very gravity
of the position caused by the military situation and the consequent
increase in the American military programme had some incidental
advantages in giving a simple formula by which every demand for
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THIRD MEETING OF THE COUNCIL (Aug. 1918) 201
transport could be tested. Every 6,000 tons of imports saved
enabled a thousand additional American soldiers to be maintained
in and therefore sent to France, and every department asking
for a 6,000-ton cargo, therefore, had to make its request responsibly
with the knowledge that, if its request were granted, a thousand
American soldiers would have to be left in America.
CrviLiAK Commodities
At the same meeting the Coimcil, without detailed con-
sideration of raw materials which were not at that time completely
examined, passed the following resolution :
With regard to the programmes of civilian commodities generally,
until further order, actual recorded consumption of the past year should
be taken as setting the maximum limit for progranmies of importation
for the next year. This principle is not to be understood as preventing
a different distribution as between the different Allies or a greater impor-
tation than last year where a country has used up stocks and must have
a larger importation to avoid a reduction of consumption. This principle
is to be communicated to Programme Committees in order to set the
maximum limit to the programmes they prepare for the Council.
The principle so laid down proved of considerable value in the
subsequent detailed work during the next few months.
Coal Supplies
The problem of coal supplies, which was never absent from any
agenda of either the Coxmcil or the Executive, was also discussed
in relation to a nmnber of special difl&culties that were now being
experienced. The French representatives called attention to the
shortage in the French supplies, which has already been explained ;
and the ItaUan representatives pointed out that while the quanti-
ties were being duly dispatched the quality of the coal was often
inferior* A Coal Programme Committee, formed as a consequence
of these representations, completed the list of programme com-
mittees for all main conmiodities. At the same time thelnter- Allied
Transportation Coimcil (which dealt with railway transport in
France) sent an embarrassing request that the quantity of coal sent
by the long sea route into Italy, which had already been increased
from 150,000 tons to 250,000 tons, should now be raised to 350,000
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202 AIJLIED CONTROL
tons a month in order to give relief to the French railways and
release railway wagons required by the military necessities of
the moment. As this would have meant the use of more than
150,000 tons of shipping, the Council felt imable to grant this
request.
The Council at the same meeting approved the detailed
organization of its executive staff, and arranged to accept
a certain responsibility for the transport of Swiss food. They
also examined a number of technical problems such as the loss
of general cargo-carrying capacity through the conveyance of oil
fuel in the double bottoms of Atlantic liners, the retention of
vessels in Allied ports imder legal process, and the congestion and
delay of ships at Port Said and in Italian ports. At the same
meeting an invitation was addressed to the Japanese Government
to join the Coxmcil, but this invitation had not been accepted by
the date of the Armistice.
This third meeting of the Coxmcil, the first for four months,
thus confirmed the action taken in its name since the last meeting ;
ratified the agreements effected informally between the Ministers
during the same period; and explored the grave problems of
supply for the opening fifth year of the war. But it deferred the
d^nite solution of these problems till its next, and, as it proved,
at once its most important and its final meeting during the war.
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CHAPTER IX
FROM AUGUST 1918 TO THE ABMISTICE
The Current Work. Supplies of the Fifth Year. The Problem and Proposed
Solution. Last Meeting of Council during the War (September 80). Its decisions.
Statement of Shipping Position in September. Policy as to Public Announce-
ments.
In the month which elapsed between the third meeting of the
Council on Aiiguat 29-30 and the fourth on September 30, the
Executive carried on their work without any incident of the first
importance.
From August 15 to September 14, 603,314 tons of coal were
dispatched to Italy, bringing the av^age for the six months to
593,061, excluding shipments for the special miUtary reserve;
1,394,140 tons of coal were sent to France in August, 1,244,174 in
September. The neutral pool tonnage under the control of the
Executive increased by the end of September to 463,034 tons d.w.
and was distributed on the general plan already described. Various
technical measures were taken to improve the use of local tonnage
to relieve congestion at Port Said and to utiUze certain small
French bay ports hitherto idle for want of tonnage of sufficiently
small draught. The employment of thirty ex-enemy vessels recently
acquired by Brazil was also arranged. Special measures were
taken to meet a deficit of some 30,000 tons in the prospective
Belgian relief supplies which had been caused by a strike of
dockers at Rotterdam. Some help was also given in connexion
with the transport of American troops of whom 313,000 in all
were embarked in August, 103,985 in American and French
tonnage, 195,589 in British, and 10,426 in Italian.
Much the most important work done during this months
however, was the examination of the big supply programmes,
particularly of munitions and food, the preparation of a complete
statement of the position for the Council and the agreement upon
recommendations for action.
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204 ALLIED CONTROL
The statement so prepared and submitted tb the Council on
September 30 illustrates better than any other document the
nature of the work of the Council and Executive at their stage of
fullest development. It is, therefore, reprinted on p. 310 and may
be briefly smnmarized here.
Supplies fob the Fifth Year
In preparing the proposals for the fifth year of the war the
Executive now had the advantage of a much more accurate and
authoritative estimate of the whole position than had hitherto
been available. The Statistical Departments of the four national
divisions had been in full working order for some time and were
co-operating well. They now presented a unanimous estimate,
carrying the collective authority of the experts of the four coun-
tries, as to the total quantity of imports which the European
Allies could hope to transport in the fifth year. Within this total
a selection could be made ; but the total could not be exceeded
unless the estimates were wrong ; and no one was in a position
to challenge estimates so prepared.
It was calculated that the total sea-borne imports which
France, Italy, and the United Kingdom could expect to receive
during the cereal year 191&-19 would amoimt to 72,500,000
tons weight.
This estimate made allowance for the shipping allotted to
supplying the Fleets and the military expeditions, and to the
maintenance of bunker depots ; for the minimum requirements of
the Colonies ; and for certain definite obligations such as Belgian
Relief €md the conveyance to Norway of coal which had been
furnished in return for her tonnage. It was considered, and
rightiy, that no withdrawals of tonnage from these services for
import work would prove possible. No allowance was made for
the provision of ships for American supplies. Even if no tonnage
were diverted for that purpose the total imports would, therefore,
only amoimt to
if or coal
raiv materials i
'* I ^ [-for the three European Allies.
„ munitions
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FROM AUGUST TO THE ARMISTICE 206
The real area of selection was, however, considerably smalls
than these figures alone would suggest. 7,600,000 tons of ore,
3,600,000 tons of timber and paper-making material, 1,760,000
tons of sundry foodstuffs and raw materials were estimated to
come in as return cargoes on vessels sent outward with coal, &c.,
from Great Britain. Reduction on these imports would be
practically useless as no other necessary imports could be obtained
on the routes to which the vessels were being sent with their
coal. In addition to these 12,760,000 tons of imports in which
no useful economy C9uld be made, the total of 72,600,000 tons
included 26-2 million tons of coal for France and Italy. Here
again no economy could be looked for, since the Italian import
was certainly a bare minimum and no reduction in the French
coal (sent in small Channel steamers) could be used to give any
substantial help to other imports.
In considering the problem the Executive recommended the
immediate acceptance of the coal imports. This, th^efore, left
( for raw materials '
47*3 million tons
for the three European
Allies.
„ food
„ munitions
This figure included both the 12,760,000 of ' non-transferable '
imports and also any military oats (i. e. oats for Army horses) it
might be necessary to send to the military forces.
Before recommending allocation within this figure the Execu-
tive called attention to one favourable factor. There was a
practical certainty that by the end of the siunmer of 1919 the
enormous increase of American building would improve the whole
shipping situation. This prospect could not of co\u*se increase
imports in the intervening period. It made possible, however,
a larger consumption in that period because stocks could be safely
reduced to a lower point.
With this preface the Executive proceeded to explain that no
substantial relief could be expected by any reduction in raw
materials other than those included in the munitions demand.
This left, therefore,
39-8 million tons I *^^ ^^^. . I for the three European Allies,
( „ mimitions |
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206 ALLIED CONTROL
The essential issue was, therefore, to divide this 39-8 million tons
between the two great programmes of food and mmiitions, which
between them had asked for an importation of 49,000,000 tons.
The Executive first criticized the food demands. They pointed
out that while 27,000,000 tons were now being asked the total
importations for the previous year had only amoxmted to 22,500,000
tons and the harvests of 1918 were certainly better. The
cereal harvests at home were estimated to amoimt to about
2,000,000 tons more. This was only partly offset by a comparative
failure in other crops, and ought at least to enable imports to be
kept down to the previous year's figure instead of being increased
by 4,600,000 tons. Moreover, the larger supplies in the near
source of North America enabled the stocks to be more safely run
down. An actual emergency could be met with shorter notice.
The Executive then recalled the provisional decision of the last
meeting that the programme should begin on the basis of
18*5 million tons, excluding military oats, which was equivalent
to about 20,000,000 tons including them. They recognized,
however, that this was a very bare figure. They also pointed out
that over a million tons of miscellaneous food imports would come
in tonnage that could not be transferred at will, and at the same
time could not from their nature be regarded as substitutes for
the main imports in the ' priority ' programme. They, therefore,
recommended reducing the food programme by 5,000,000 tons,
leaving the imports at 22,000,000 tons.
This left
17-8 million tons for munitions for the three European Allies.
The 17-8 million tons thus given to munitions involved a deficit
of 4-2 million tons on their programme. And the deficit was
really greater because no allowance had been made for supplying
munitions from Allied stocks to the American Army, and it was
certain that such suppUes would have to be made.
Moreover, the problem of finding ships to transport American
Army supplies from the North Atlantic was still unsolved, and
there was no margin to meet it. At the same time the Executive
were convinced that inunediate assistance was necessary.
So strongly indeed had th^ felt this that, without waiting
for a meeting of the Council, they had already approached the
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FROM AUGUST TO THE ARMSTICE 207
British Government and secured the allocation of 200,000 tons
of shipping for American supplies for loading in September and
October, at the expense of an equivalent reduction in European
imports. They now recommended that a further 300,000 tons should
similarly be fdlotted before the end of the year. They felt able to
take this action, and to do it without proposing a reduction in
the total imports into Europe which the statisticians had estimated
for the cereal year ending August 1919, because they beUeved
that America would be able to give assistance at least equivalent
to these 500,000 tons in the latter part of the cereal year itself*
They were convinced, moreover, that this would result from the
utilization of the ordinary Programme Committee and Transport
Council machinery, and the appUcation of the principle of equal
sacrifice upon which they were based. They, therefore, proposed
that this assistance should be given without any bargain as to the
exact quantity of tonnage America would supply later and subject
only to the condition that America would give adequate assurances
as to co-operation with the Allies through the Allied Maritime
Transport Coimcil. The passage in which they explained their
exact position (printed on p. 318) is perhaps the clearest presenta-
tion in an official dociunent both of the position at this time and
of the character of the AUied organization now developed.
The final recommendation, therefore, as to allocation between
munitions and food was based on an estimate that in spite of
immediate assistance given to American supplies 39*8 miUion tons
of food and mimitions together could be anticipated in the cereal
year.
As explained above, this was distributed in the proportions
of 22 million tons to food and 17-8 million tons to mimitions, in-
volving a reduction of 5 miUion tons in the first programme and
4-2 million tons in the second. The Executive proposed, however,
the adoption of a further important principle designed to mitigate
the consequences of these reductions. In the autunm of the year
the actual food stocks in different countries were, of course, at
their maximimi, the harvests having just been reaped. It was
precisely at this tiiAe of the year, however, that the largest
importations of munitions and raw materials for manufacturing
them were needed, so that the maximmn offensive preparations
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208 ALLIED CONTROL
might be completed before the campaigns of the following spring.
These two considerations both pointed to a larger proportion of
mmiitions being imported during the autmnn and winter, and of
food in the following spring and summer.
With this preface the Executive made the following recom-
mendations :
Munitions in Winter — Food afterwards.
(1) That during the later autumn and winter a general preference
shall be given to the transport of munitions and Army supplies as
compared with food.
(2) That, when necessary, but as late as possible without nmniug
undue risk of actual shortage of food, a similar preference shall be given
to the transport of food in the spring or early summer.
Reduction of Stocks.
(8) That in view of the prospect of substantial deficit in the whole
Allied tonnage position by next summer, and in order to avoid reducing
the shipment of essential commodities required for actual consumption
during the year up to August (particularly munitions) all supply depart-
ments should be asked to effect a reduction of stocks until they approxi-
mate, towards the end of August, to the quantities required for actual
distribution.
Raw Materials.
(4) That the principle provisionally approved at the last session for
raw materials, viz. that actual recorded consumption of last year should
be taken as setting the maximum limit for programmes for the ensuing
year, should continue to be applied.
Food.
(5) That 18-5 million tons of importations of all articles included in
the Food Programme, except military oats, should be confirmed as the
figure for the year.
(6) That if the food position at the end of the winter or later shows
such a course to be necessary in order to avoid food shortage, food ship*
ments shall have priority in excess of the proportion due on the 18*5 basis
at the expense of tonnage allotted to other services.
(7) That the importation of military oats should still be continued
provisionally on the basis of the old programme, pending a full reiM>rt of
the whole situation.
(8) That for the purpose of considering the tonnage available for other
services the total importations of food (and all other articles included in
the Food Programme), including all miscellaneous foodstuffs and military
oats, should be provisionally estimated at 22,000,000 tons.
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FROM AUGUST TO THE ARMISTICE 209
Munitions.
(9) That in estimating what is available for the European Munitions
imports it should be provisionally assumed that any tonnage assistance
Tendered to America, whether by the allocation of ships or the supply of
artiUery, will be returned within the cereal year, thus leaving 17*8 million
tons for European munitions, including ore, pyrites, phosphate rock,
railway material, and lubricating oil, but that it should be recognized that
this requires consideration after examination of the munitions programme^
and in particular of the arrangements there proposed for supplies to the
American forces.
Coal.
(10) That the strongest recommendations should be made to the
British Government as to the immense importance to the entire Allied
supply position of increasing the production of coal.
American Army Supply.
(11) That the action taken in the allocation of 200,000 tons of shipjnng
(widi increases to 250,000 tons if double-bottom shipments are discon-
tinued) in September and October be confirmed, and that the Executive
be instructed to endeavour to arrange to increase the allocation to a total
of about 500,000 tons up to the end of the year in addition to any space
which can be made available by the release of double bottoms.
American Co-operation.
(12) That these arrangements be subject to adequate assurances ftom
America as to co-operation with the Allies through the Allied Maritime
Transport Council.
American Trooping Programme.
(18) That the Council should not recommend at this moment any
reduction in the embarkation of American soldiers in spite of the grave
conditions of the import programmes as indicated above, but should be
prepared to recommend such a reduction, if necessary, in the embarkations
of next year in order to meet any crisis that may arise in the imports of
food or other supplies at the time.
Public Statemeni of Position.
(14) That in view of the severe sacrifices that must in any event be
entailed if the American military programme is continued a fiill statement
of the position should be issued in the name of the Council and through
the respective Governments to the public of the four countries, this
statement onphasizing the fact that it is the supreme importance of
increasing the AUied forces in France which is the reason for the sacrifices
asked for, and that these sacrifices are likely to be required only during
the winter and spring, the supply position being thereafter in all probability
greatly improved.
U69.il p
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210 ALIJED CONTROL
The Executive concluded their recommendations by adding
that they realized that if adopted they would cause hardship for
the consuming public, injury to many interests, and grave anxiety
to the controlling departments ; but that in view of the supreme
importance both of increasing the American forces in France to
the maximum number and ol fully equipping those forces so that
they might obtain the maximum fighting value in the summer
of the next year, they had not felt justified in recommending the
only altomative course, namely, reduction of the American mili-
tary progranune on account of the shortage of tonnage.
FouBTH Meeting op Council
The Council met in London for what proved to be the last meet-
ing of the wai^from September SO to October 2. It devoted itself
to considering the report just summarized. The recommendations
were all approved (see p. 3S8) with the addition of the following
additional resolution :
That the Council, having before it the following provisional allocations
of tonnage for arrival from September to December inclusive, viz.
Food, including military oats, 7,000,000 tons.
Munitions and raw materials, 9,000,000 tons,
recommends that approximately 500,000 tons be diverted firom the above
allocatioD for the American Army progranune for October, November, and
December, including the 200,000 tons already arranged, but in additicui
to any further space that can be provided by the release of double bottoms.
The public statement so authorized by the Council was prepared
for issue, but owing to various difficulties, which need not be here
detailed, could not be actually published before the date at which
the inuninence of the Armistice made it unnecessary. It is pro*
duced h^re as illustrating both the tonnage position at this moment
and the kind of periodical statement which the Transport Council
intended to issue during the following year had the war continued :
General SUOemeni as to Allied Shipping Position {September 1918).
In view of the important assistance which it is possible for the puUk^
in the Allied countries to give to the supply of the military forces, and in
particular to the transport and supply Of the American Army, by econo-
mizing in the consumption both of food and other imported commodities»
the Allied Maritime Transport Council have decided to issue from time to
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FROM AUGUST TO THE ARMISTICE
211
time a general statement of the shipping position with full information as
to losses and new building.
For this purpose it has been thought best to include in the informa-
tion the losses and building of all the main maritime countries including
neutrals, enemy powers alone being excluded ; and to make the statement
in terms of deadweight tonnage, in order to give a closer indication of
cargo-carrying capacity than gross tonnage does. In view of the difficulty
of obtaining up-to-date information as to new building in certain neutral
countries, and of ascertaining the exact deadweight tonnage of certain
classes of vessels, the information may sometimes be somewhat less exact
than if it were confined to Allied countries and stated in terms of gross
tonnage. The margin of possible inaccuracy is, however, small, and not
sufficient, in the opinion of the Council, to outweigh the advantages of
this form of statement.
The following table gives the losses and new building of vessels
(exclusive of small craft) in the first eight months of this year :
Neutraia (Nanoay,
Sweden^ SpUfi^
Denmark),
Deadweight
Tonnage.
396,000
169,000
-227,000
The general Allied shipping position is thus that the Allies are now
building more ships than they are losing but not so many more as the
additional number required for the American Army in France.
During this period America has built nearly 1,500,000 tons dead-
weight more vessels than she has lost, but she has needed all these and
more besides to transport and maintain her forces in France.
The European Allies have, on the other hand, lost a little over
1,000,000 tons more than they have built, and as it is for the present necessary
for British tonnage to assist in both the transportation and supply of
American tonnage, the need for economy and rigid restriction of all
import commodities is as great as ever.
It is true that the sul^marine has faUed in its first object, which was
to reduce the military strength of Great Britain, France, and Italy, by
reducing the supplies both to maintain their forces and to feed their
populations.
Every army in every field has hitherto been fully supplied, and no
reduction has been made on account of the submarine campaign. On the
contrary, in addition to the forces which were in the field when the intensive
campaign commenced in the early part of 1917, it is a matter of public
p 2
Three European
AUieeiOreai
Britain, Fraitce^
Italy).
United
States.
Other Ames
(Japan, Russia,
Brazil, Greece,
Portugai,
Belgium).
Tonnage.
Deadweight
Tannage.
Deadweight
Tonnage.
Losses (all causes)
Building .
• 2,S19,000
1,679,000
387,000
1,798,000
222,000
470,000
Net loss or gain
-1,140,000
+ 1,411,000
+248,000
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212 ALLIED CONTROL
knowledge that there are now in France about 1,750,000 American troops.
That army is the measm-e of the failm-e of the submarine.
World building, including American, now exceeds world losses, and
the harvests of this year are somewhat better than those of last year*
This means that the Allies can transport and supply in France for next
year's campaign an immensely larger army than they have ever com-
manded before, but it does not mean that there is tonnage sufficient to
import more or even as much for civilian consumption in the future as
in the past. On the contrary, both the need and reward of economy are
greater than ever. Early victory depends upon having sufficient forces
in France to achieve decisive success and upon making it dear at the
earliest moment to all countries, including the enemy, that the Allies will
have such a force and mean to use it. America has the men, and desires
as much as the European Allies do that they shall come and come quickly.
But these forces would necessarily be limited if the supplies in France to
maintain them and the ships to transport those supplies were insuffident*
Every pound of supplies, whether of food or clothing or other imported
articles, which we can save here means so much more shipping to take
supplies for the armies in France, and therefore so much more hdp towards
a bigger force and early victory.
If every one in the three European Allied countries saved only t^vo
ounces a day as compared with last year's consumption, this saving alone
would enable half a million additional troops to be s^nt to France and
maintained there.
It is well that the public should, in considering the sacrifices th^ are
asked to make, remember those which Germany has borne for several
years. In Germany the allowance of bread is 2f pounds a week, their
allowance of bacon and meat together amounts to 9 ounces a wedc, their
allowance of fat between 2 and 2 J ounces per week.
The Allied countries will not be asked to suffer a reduction in food
so serious as this, and such reductions as will be necessary will be made
with the definite prospect of lasting only a few months. There is evay
hope that by the summer of next year at the latest the whole Allied
shipping position will be substantially improved. If, however, the
maximum number of American troops are to be transported to France
before the fighting of next year, and if the supplies, without which they
cannot attain their full fighting efficiency, are also to be sent, it can only
be by such a use of ships as will necessarily involve severe, though tem-
porary, hardship to the public in the Allied countries.
This announcement was designed to steer a middle course
between the Scylla and Charybdis of all statements of the ship-
ping and submarine position during the war. If these were opti*
mistic they encouraged consiunption and made the task of those
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FROM AUGUST TO THE ARMISTICE 213
attempting to enforce restrictions more difficult. If they were pessi-
mistic they encouraged the enemy. The practical result of these
conflicting considerations was that the statements were alternately
too sangyine and too depressing. This had the worst possible
efifects. Not only did it confuse the public and discredit official
communications, but each kind of statement tended to be ignored
by those for whom it was primarily designed. If a depressing
statement was issued it was ignored by the Allied citizen who
found it unpleasant to have a good meal disturbed by a bad
conscience ; but it was read eagerly by the enemy, who derived
from it a much needed encouragement. If a sanguine statement
was issued it was for converse reasons read eagerly at home and
discredited in Germany. The one escape from this dilemma was
to emphasize constantly the difference between the extreme
restrictions in Germany and the much lighter restrictions which
the Allied populations were asked to bear; to show that the
whole AUied cause depended upon reduced consmnption ; and that
with such reduction success was assured. This was indeed ilie
real truth of the position and its statement in this form could
neither encourage the enemy nor give any excuse for unnecessary
consumption at home. It had been frequently urged, but the
central control of public announcements on a subject with so wide
a range had not been sufficiently effective to enable it to be con-
sistently maintained.
CUEBENT WOEK
The current work of the Executive during ilie last two months
before the Armistice may be briefly summarized.
In the two months September 15 to November 14, 1,199,958
tons of coal were sent to Italy, of which 865,790 tons were British
and 334,168 French. This gave an average for the eight months
of 594,790 tons (in addition to the military reserve) as compared
with the programme of 600,000 tons.
France received 1,244,174 tons of coal in September and
1,251,073 in October. The average for the seven months was
1,380,430 tons as compared with the nominal programme of
1,740,000; but, as previously explained, the shortage was due
to other causes than the failure to provide tonnage.
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214 ALLIED CONTROL
Belgian relief was adequately maintained with the assistance
of certain emergency shipments, small deficits in the four months
June to September being nearly made up by arrivals in excess of
the programme in October and November.
The neutral pool tonnage increased to over 500,000 tons
d.w. and was satisfactorily dealt with.
A large number of detailed arrangements were made to give
emergency assistance to several Allied services or to effect
economies.
Among these, one arrangement of particular interest may be
noted. It has been pointed out that on the whole the imports
required by the Allies for war purposes tended to be heavier in
rdation to size than peace imports, so that ships, while loaded
down to their Plimsoll marks, commonly had empty space in than.
But ilie requirements of the American Army were very different
in character. Operating with a home base three thousand miles
away, they had to bring a large proportion of manufactured
articles (motor cars, &c.) which the European Allies made at home
and did not need to ship or only had to ship across the Channel.
Manufactured articles of this kind tend to be bulky and light in
proportion to their size. American cargoes, therefore, tended to
be ' measurement cargoes ' which filled the ship's space while
still leaving it to ride light well above the Plimsoll marks. The
French munitions from North America at this time included
cargoes of exactiy the opposite kind, steel and rails and other
articles which were compact and heavy. The separate arrange-
ment of iliese two programmes therefore involved French ships
leaving North America heavily loaded down to their marks wHh
empty space in them ; and American ships leaving the same ports
witii all their space full but with less weight than they were capable
of carrying. The Executive therefore arranged with the American
Government to load 150,000 tons of French steel a month in
American ships, supplying extra tonnage to America in compensa-
tion. This enabled a much better combination of cai^oes to be
effected. The net economy was estimated at about 50,000 tons
of imports a month, which was equivalent to the continuous
employment of about 135,000 tons d.w. of shipping in the North
Atiantic.
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FROM AUGUST TO THE ARMISTICE 216
Throughout the whole year a valuable saving in shipping had
been effected by another co-operative arrangement. It was agreed
that all suitable vessels, wheilier British, Italian, or neutral, and
whether under ilie orders of the British or Italian Governments
or the A.M.T.C., which took coal to Italy should on their return
voyage bring ore to United Kingdom from ilie Mediterranean or
Spain. This agreement was conscientiously executed by the
Italian Government in spite of the serious ddays to their vessels
which were sometimes involved, and the arrangement proved of
very great value in maintaining British ore supplies which were
the most vital raw material of the munitions manufactures and
had at one time been dangerously low.
Meantime the difficult and intricate arrangements for allotting
tonnage in accordance with the approved Food Programme were
successfuUy made and each country received its allotted quota
within a very narrow margin.
In accordance with the plan described above 200,000 tons of
shipping were allotted in aid of the American supply programme
in October, and a further 69,893 had been allotted in November
when the Armistice terminated the arrangements.
Finally, shortiy before the Armistice, America took drastic
action to put into effect the principles to which she had recently
assented in October, by the most severe reductions in her imports
programme and by the issue of orders to witiidraw a large propor-
tion of the tonnage hitherto engaged in civilian work for war
service.
The Armistice thus found the Allied organization in efficient
and almost complete working order, its immediate task successfully
accomplished, and its preparations for the serious but final strain
of the ensuing winter well in hand.
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CHAPTER X
AFTER THE ARMISTICE
The Councfls* loss of Authority. Shipping position in winter of 1918-19.
The importance of Port Delays. Reasons for loss of authority. Plans ci
TianQK>rt Executive for Armistice Work. The proposed * General Economic
CouncQ *• The Allied CouncQ of Supply and Relief. The Siqpreme Economic
CouncU. Armistice Tasks. Enemy tonnage. Transport of food, of prisonen,
of returning troops.
The Allied Maritime Transport Council and its Executive
reached the climax of their authority and their utiUty in the
autumn of 1918. From the Armistice onwards their power
diminished to a mere shadow of its former self and such utility as
they continued to possess was within different and more limited
spheres of action. The Council itself was not indeed formally
terminated until April 7, 1919, when it became mei^ed in the
Supreme Economic Council, and the Executive, with changed
duties and personnel, continued in existence as late as February 7,
1920. The work imdertaken and the influence exercised by both
the Council and Executive were, however, entirely different after
the conclusion of hostilities.
It is necessary and very instructive to trace the course of this
decline from power during tiie winter of 1918-19, though it is
a somewhat painful duty for any one who was associated with the
AUied organization in the period of the war.
SmppiNG IN THE Winter of 1918-19
It will be well, however, in order that the events of tiie next
few months may be seen in their proper perspective, to preface
the description of them by a slight sketch of the development of
the tonnage position throughout the winter of 1918-19.
There was the same kind of pause in the transition from war
to peace as tiiere had been in August 1914 in the transition from
peace to war. The demand on tonnage for war suppUes ceased
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POSITION AFTER THE ARMISTICE 217
abruptly and the full demands of civilian life only became slowly
operative. The stoppage of munitions shipments, the termination
of the convoy arrangements and therefore of the incidental delays,
the cessation of sinkings, the release of ships allocated to the
transport of American troops to France, gave an immediate reUef
to the tonnage situation. The combined effect of these circum-
stances was to render it difficult, not to find shipping for the work
required of ihem, but to decide to what new work to allocate
vessels completing their voyages. For the moment there was an
apparent surplus of tonnage. A number of charters were offered
or concluded at comparatively low rates, and the liner freights in
the North Atlantic fell in some cases to one-sixth of the rates in
force immediately before.
This state of affairs was rapidly terminated. The end of
hostilities was at once followed by labour difficulties. Port con-
gestion became serious in nearly every country in the world, and
the transporting capacity of vessels was therefore seriously re-
duced. The labour difficulties coincided with an immense demand
for repairs postponed during the war and for the reconditioning
of vessels returned from Government service. In the United
Kingdom alone over six hundred vessels were under or awaiting
repair. At the same time, the poUcy of de-controlling ships
from Government requisition which was b^un by the United
States, Great Britain, and France alike in February 1919, resulted
in the return of vessels to long distance pre-war routes and to
some extent in their use for the transport of commodities not
regarded as essential during the war. While these factors were
again rendering the tonnage situation stringent, the demand for
cargo tonnage, for reUef suppUes, and for passenger tonnage for
repatriation purposes, became efftetive. Though some assistance
was afforded by the Austrian tonnage, none was forthcoming
from the more important German tonnage which remained idle
until late in March. On the top of these difficulties came the threat
of a triple strike in the United Kingdom of the coal miners, the
dock labourers, and the transport workers. This, although it was
ultimately averted, necessitated such precautionary measures as
the increase of shipments of coal to bunker stations and the ' double
bunkering ' of vessels in the North Atlantic, with corresponding
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218 ALLIED CONTROL
loss of cargo. The Italian Government were faced with a situation
of extreme gravity, as a coal strike in the United Kingdom would
have forced them to divert vessels allotted for wheat from North
America for the transport of American coal and their reduced
food stocks allowed no sufficient margin for any such diversions.
The combined effect of these causes was a stringent tonnage
situation in March 1919, comparable in its actual difficulties (in
spite of the increase in the nmnber of ships and the decrease in
real requirements) to the worst period of the war.
On March 14, however, an agreement was concluded which
had the effect of bringing the German ships into use, and the
position improved gradually, although not very rapidly, after
that date. Henceforth though shipping remained apparently
short, and freights high, tonnage was steadily increasing, and the
main cause of such shortage as there was, was due to delays in
loading and discharging.
The importance of this cause during 1919 is indeed very re-
markable. The delays themselves were due partly to the disloca-
tion of internal railway transport, which left the docks congested
with goods, and partly to shorter hours or slacker work. The result
was to reduce the importing capacity of ships by more than 30 per
cent.9 that is, the ships in 1919 carried less than 70 per cent, of the
cargoes which they would have carried if port conditions of loading
and discharge had been as they were in 1913. This fact may be
forcibly put by stating that if it had been possible in 1919, by
a wave of a magic wand, either to bring back at once into active
employment all the tonnage sunk by the Germans throughout
the war, or alternatively to improve port conditions to their 1918
level, the second of these alternatives would have given much the
greater relief to the situation aAd help to the general economic
position of the world.
But although after the first pause between war and peace
shipping long remained inadequate to the demands upon it, it
ceased immediately on the conclusion of hostilities to be the main
factor in the general economic position. From that moment,
difficulties of money became more important than difficulties of
shipping. Half of Europe had no money to buy the necessities of
life ; the rest of the world had lost its impelling motive to lend ;
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POSITION AFTEB THE ARMISTICE 219
finance resumed its normal position, more indeed than its normal
position, of dominance over the supply system.
. In these circumstances it was inevitable that a shipping
organization as such could not continue to control or exercise any
considerable influence upon economic policy after ilie termination
of hostilities. The power of this organization had depended upon
the fact that shipping was the limiting factor in supplies, that
supplies were so urgently needed and finance so relatively un-
important that the amoimt of shipping determined the quantity
of supplies imported, and the allocation of shipping determined
what supplies should be imported. The general control of supplies^
and therefore of economic poUcy, had thus been forced auto-
matically into the hands of those who controlled ships. From the
moment the enemy was beaten, their power was necessarily ended.
The Transport Executive had clearly foreseen some time before
the Armistice, first, that a shipping organization, as such, could
not control the economic position ; second, that while shipping
would be released through war requirements it would still be in
strong demand for many new needs that peace would bring,
particularly for rehef ; and third, that an AUied economic organiza-
tion would certainly be required both for relief purposes and for
solving the innmnerable economic problems either left over from
the war or necessarily arising with the conclusion of peace.
As soon as it became evident at iiie end of October 1918 that
an Armistice would be signed, the loading programmes of ships
under Allied control were examined. Detailed loading instruc-
tions were sent to loading officers in ports throughout the World
informing them what supplies should be left behind and what
supplies shipped if an Armistice were concluded. These instruc-
tions, which were telegraphed confidentially to them some days
before the Armistice, came automatically into effect upon its
conclusion.
In the next place, the Transport Executive and ilie permanent
representatives of the Food Council examined the probable effect
on the supply arrangements of the AUies of the conclusion of an
Armistice with particular reference to the new imports probably
required into neutral coimtries, and into Germany if the blockade
was suspended. On October 28 they strongly recommended that
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220 ALLIED CONTROL
a provision should be included in the Armistice itself which would
secure the delivery of the German and Austrian vessels and their
control by the Allied Maritime Transport Council, and a member
of the TransportExecutive went to Paris to press this recommenda-
tion (see p. 323). From the point of view of ilie strict purposes
of an Armistice (i. e. to maintain a certain military position during
the negotiations for peace) such a provision would perhaps have
been somewhat irregular since the enemy's military position
remained the same, whether his ships were immobilized in his own
harbours or imder Allied control. Whether for this or other
reasons the proposal was not adopted and no provision was made
in the Armistice of November 11 for the surrender of the German
ships. In the event, through reasons which will appear below,
no provision was made to secure the use of more sldps till two
months had elapsed, and, further difficulties accruing, the delivery
of ilie ships did not actually b^in until March 22, 1919. This
delay in the utilization of nearly a million tons of shipping ready
for sea for about four months had a substantial effect on the
world's shipping position and in particular increased seriously
the difficulties of relief.
The Proposed General Economic Council
More important, and for the moment equally unsuccessful,
were the proposals for the continued contrcJ of the economic
position during the transition period by an Allied organization.
Realizing, as the event proved, that such control would be re-
quired, and knowing by experience the difficulties and delay in
creating a new organization with new personnel and new machinery,
all ilie members of the Executive, and others associated with its
working, agreed that the best course was for the AUied Maritime
Transport Coimcil itself to be converted without breach of con-
tinuity into a General Economic Council with certain extensions
and changes of personnel. They at once brought the question
before ilieir respective Grovemments. The British Government
took ilie initiative in making a formal proposal to the other
Governments. A memorandum was submitted to them which
pointed out that among a large number of questions which might
call for Inter- Allied discussion the following were of special ui^ncy:
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POSITION AFTER THE ARMISTICE 221
{a) the nature and the amount of the assistance to be given by the
Allies for ihe reconstruction of devastated territories; (b) ex-
changes and other reciprocal concessions between the Allies in
foodstuffs and other essential commodities; and {c) concerted
action in acquiring and distributing essential commodities of which
the supply was insufficient.
Within two days of the Armistice, on November 13, an official
communication was made to the Governments of the United States,
France, and Italy suggesting that it was desirable to revise the
representation and functions of the AJif.T.C., so as to make it
a General Economic Council which would co-ordinate the work
of the various Coimdls and through them the work of ihe Pro-
gramme Committees (see p. 329).
The American Government, however, took the view that it
was desirable after the cessation of hostiUties that the war organi-
zations should be discontinued and that where necessary the new
problems of the Armistice period should be dealt with by appro-
priate new machinery. The Transport Coimcil was ihus deprived
of the authority necessary to carry on ihe work which it had con-
templated.
During December prolonged discussions took place between
the Food Controllers and other members of the AUied and
Associated Governments as to the principles upon which a new
body to be concerned with the re- victualling of AUied, neutral,
and enemy coimtries should be formed. Agreement on a document
was arrived at on December 12 and the resulting Council, the
Allied Supreme Council of Supply and ReUef was established in
Paris in January 1919. This Council, restricted to one not clearly
separable part of the many economic problems facing ihe Allies,
without the assistance of a staff accustomed to work together
and without either the uniting force of the war or the tradition
of united action which that force had given to the war organiza-
tions, proved ineffective.
In February 1919 it was merged in and replaced by the
Supreme Economic Coimcil, which was in personnel, in functions,
and in general principles of organization, almost exactly ihe same
as the body into which the Transport Executive had proposed to
transform the Transport Council at the b^mning of tiie previous
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222 ALUED CONTROL
November. Even so, however, the new Council was too tardily
commenced, too hurriedly improvised, and insufficiently equipped
with a personnel accustomed to corporate work. Moreover, over
three invaluable months had in ilie meantime been lost. There
can be Uttle doubt that if the two proposals made by the Transport
Executive before the Armistice had been adopted the economic
position in the spring of 1919 and possibly aft^wards would have
been substantially better. The German ships would have been
at work in December instead of March, and food would have gone
into Germany as from January instead of April, with results it
is not easy now to measure exactly upon the political position
in Germany and the consequent difficulties of the earher peace
negotiations. At the same time the reUef assistance given to the
rest of Europe would have been facilitated.
Abmistice Tasks
Meantime the Allied Maritime Transport Council and Executive,
denied the opportunity of dealing with other economic problems,
were left to continue their own particular task of dealing with
shipping, with the difference that to deal with shipping now meant
to deal with shipping only and not to control suppUes. It was,
of course, evident as soon as hostiUties ceased that the system
adopted during the war of allotting tonnage in accordance with
a nmnber of specified AUied programmes was now no longer
either necessary or practicable. That system imposed a joint
responsibiUty upon sJl the Associated Governments both for the
programmes of each country and the employment of each mer-
chant marine, and impUed a complete and effective requisitioning
of all ships. There was a general desire that the consequent
limitation on the freedom of action of each national Government
should be removed as soon as possible, and that each Government
should deal independently and responsibly with its own import
problem, and should be free at the time it judged best to release
its own shipping either partially or completely from Government
control. The British Government were anxious to proceed rapidly
with this policy of release from control, and were indeed disposed
to believe that full freedom could be given at a much earlier date
than ultimately proved possible. The French and Italian Govem-
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POSITION AFTER THE ARMISTICE 223
ments, while entirely agreeing that ultimate freedom was desirable,
were not unnaturally anxious to be saf guarded in the transition
from one system to another against the risk of either failing to
secure adequate tonnage or having to pay imdue rates of freight.
The reasonableness of this position was recognized by the British
Government, who concluded two agreements, one with France
and one with Italy, guaranteeing each country tonnage up to
a specified maximum limit (namely the amount of tonnage in
service on the conclusion of hostilities) at a specified mftYinmim
rate, in general 25^. per ton dead weight per month. The terms
of the agreement are printed on p. 332 and an explanation of the
principle involved is given in the letter of January 30, 1919, printed
on the following page.
Meantime the Council and Executive were faced with the
obvious and urgent problem of the acquisition, ilie distribution
for management as between the Governments, and the allocation
for employment between the various services, of the German and
Austrian tonnage. The immediate problem was very different
for the two classes of tonnage.
The German vessels were either in German ports or imder
German control in neutral ports and, no provision having been
inserted in the Armistice of November 11, could only be brought
into use by negotiation. These negotiations were long and
intricate and cannot here be fully described. They were carried
out partly by the members of the Transport Executive, partly
by members of the Food Council's organization and partly by
special members delegated from the Supreme Economic Coimcil
or otherwise appointed. It is sufficient here to state briefly that
a clause in the renewed Armistice of January 16 and the Treves
Agreement of January 17 provided that the German ships
should be surrendered and iliat Germany should be enabled
to import food subject to the provision of the requisite finance ;
that delay in the provision of food occurred through the competing
claims of reparation for the money proposed by the Germans ;
and that in the meantime the Germans withheld their ships.
These difficulties were only finally resolved by the Brussels agree-
ment of March 14, 1919, after which the ddivery of the vessek
proceeded expeditiously. Till this date the problem of acquiring
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224 ALLIED CONTROL
the ships of course took priority over any questions as to how to
manage and employ them, llie Austrian tonnage was, on the
oilier hand, in ports which were occupied by the Italian Grovem-
ment at the Armistice and came at once into their controL It
was arranged on December 21, 1918, that they should be pro-
visionally controlled by the Transport Council and fly an Allied
flag. Their emplojmient therefore required immediate settlement.
Throughout the Armistice period there were three new services
of a kind particularly appropriate for the new enemy tonnage.
In the first place, there was an immense number of prisoners
of nearly every Allied nationality requiring repatriation. This
presented a very difficult problem because little certain informa-
tion was available or obtainable as to the numbers of the prisoners,
as to where they were and as to alternative means of transport,
for example, by land. At the same time there was naturally an
extreme pressing of public opinion to effect repatriation at the
earliest possible moment. In these circumstances the formation
of any definite and stable plans was a matter of the utmost diffi-
culty. Week by week the arrangements had to be changed and new
negotiations of a peculiarly delicate character conducted between
the different Allied Governments, each of whom was pressing the
demands for the repatriation of its own prisoners strongly upon the
authorities controlling the new tonnage.
In the second place, and only less urgent, was the desire
of each coimtry to repatriate its own troops. Here again the
principles upon which to determine allocation were very difficult.
America could claim with truth that all her soldiers were parted
from their homes by a greater distance than those of the main
European AUies, and that this distance had prevented than
having leave at home as French and British soldiers had been able
to. They were also able to claim that France needed no ships to
repatriate the great bulk of her Army, and that Great Britain
could repatriate the bulk of hers by rapid cross-Channel passages,
needing none or few of the new ships acquired from the eneny.
On the other hand. Great Britain could claim that while this was
true as to English soldiers, the early repatriation of English
soldiers was no consolation to Australian and Canadian troops,
who could make the same claims as America, with the additional
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POSITION AFTER THE ARMISTICE 226
and very strong one that they had been separated from their
homes, not for months, but for years* France was able to make
a strong though modest claim for the repatriation of her Colonial
troops and a very delicate question arose as to whether, other
things equal, coloured troops had as strong a claim for early
repatriation as white troops.
A third service suitable for the new tonnage was that of the
transport of food for relief purposes, both to Allied coimtries in
distress, such as Serbia, and to Germany. Complicating the
difficult negotiations was the fear on the part of each Government
that allocation for piuposes of immediate management and service,
however carefully safeguarded by imdertakings as to the pro-
visional character of the allocation, would in fact have a con-
siderable influence on the final assignment of vesseb for permanent
ownership.
This third service was not in very direct conflict with the
first two because it involved the conveyance of cargo and not of
passengers.
The difficult problems with regard-to acquisition, management,
and employment of German and Austrian tonnage necessarily
devolved upon the Transport Council and its Executive in the
absence of any other authority. They were, however, seriously
handicapped in this work by the fact that, owing to the circum-
stances described above, their power had lapsed and they had
received no clear authority from the respective Governments to
deal with the greater part of the new work. They did in fact under-
take it and carry a considerable part of it through successfully,
but on a number of crucial occasions their action was either
delayed or rendered ineffective. It was not imtil February 25 that
a decision of the Supreme Economic Coimcil, then recently con-
stituted, gave full and clear authority. In the earlier period the
workhadto be carried on under the difficulty of having to negotiate
with each of the Governments separately on each question of
importance. It was in order to deal with these problems that the
last two meetings of the Council on February 1 to 11 and on
March 10 were held in Paris, and the Executive was chiefly
occupied in the same work during this period.
1M0.83 o
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CHAPTER XI
LAST DAYS OF THE COUNCIL
Italian Coal before and after the Armistice. New Shipping Agreements
l)etween Great Britain, France, and Italy. The End of Co-operative Manage-
ment. The Fifth Meeting of the CouncQ (February 1, 1919). Acquisition and
Allocation of German Ships. The Sixth and Final Meeting of the Counefl
<March 10, 1919). Disruption of the Council (April 7, 1919). Work of Executive
Aprfl 1919-February 1920. Its End.
Little need be said, beyond the general description in the last
<^apter, of the current work of the Executive during the months
immediately after the Armistice. The reaction from the strain of
the war was at once reflected in the supply services ; work
slackened ; production diminished.
Throughout the pressure of the last eight crucial months
of the war Italy had been regularly supplied with almost her
«xact quota of 600,000 tons of coal a month. In the month after
the Armistice the quantity dropped to 50S,776 tons, and in the
succeeding month to 346,282, mainly through difficulties of supply
in England. This resulted in a desperate situation in Italy, and by
a great effort the supply was raised in the third month to 668,735
tons. After that Italy was dependent mainly upon her own efforts,
and never afterwards in 1919 managed to secure as much as in the
last year of the war, in spite of the diminished demands upon
tonnage.
For the three months the supply of coal to France amounted to
1,261,704, 1,154,550, and 1,216,951 tons, as compared with the
average for the ten months of 1,365,714 tons.
Meantime, as already explained, new agreements had be^i
<^ncluded by Great Britain with France and Italy imder which
the joint responsibility for supply programmes was terminated.
A definite minimum of tonnage was guaranteed, but there was no
XK>mmon responsibility for its employment or for the variation
of the amount in accordance with any variation of requirements.
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LAST DAYS OF THE COUNCIL
9an
The Allies returned in this new agreement in December 1918 from
the principle of the agreemait of November 3, 1917, to that of
the earlier agreement of December 3, 1916.
Meantime the Executive continued the control of the chartered
neutral tonnage, and maintained the supplies of Belgian Belief.
In the absence of any other authority, but with no definite
mandate from the Governments, the Executive arranged the
allocati<m of the Austro-Hungarian tonnage which had come under
the control of the Italian Government. It was agreed that the
small vessels should be left in the Adriatic for trooping and supply
work ; that passenger vesseb should be allotted to repatriation
of prisoners in priority over repatriation of troops, and that the
cargo vessels should be given to the food programme, the largest
going to Australia, those of the remainder which were suitable
for the North Atlantic being sent there and the rest going to South
America. By the middle of February 132 vessels had been allotted
in accordance with these principles to the following routes :
Service.
No.
QroesTone.
1. Mediterranean and Adriatic Trooping
60
63,724
2. Foodstofb from South Amerioa
. 17
54,619
3. IV)od8tiifEB from North Amerioa
. 31
120,S53
4. FoodstofiB from Australia
. 11
54,682
5. Repatriation of Prisoners of War
. 10
47.601
6. Amerioan Trooping . . . .
3
26,259
Total .
. 132
366,638
Considerable work was carried out during the same period
in the arrangement of the repatriation of prisoners.
Fifth Meeting of the Council
Four eventful months elapsed between the fourth meeting of
the Council before the Armistice and its fifth session in Paris on
February 1, 1919.
By that time its personnel, its authority, and its work were
transformed. One of the two British Ministers had resigned, the
other was absent, and British representation was left to the
member of the Executive. The senior of the American Delegates
had resigned, and the second Delegate, though attending this
meeting, was on the point of resignation. One of the two French
Q2
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228 AH JED CONTROL
Ministers and one of the Iti^lian Ministers were absent. Hie
American Shipping Controller, however, was in Paris, and was
in consultation, though not attending the formal meetings.
The Council at this fifth session was concerned throughout
with the acquisition, management, and employment of the enemy
tonnage.
The Treves agreement concluded on January 17 was first con-
sidered. This provided for the surrender of the German vessels for
use during the Armistice in return for the provision of facilities to
import food, but left a number of detailed arrangements to be
settled at a subsequent meeting. The Council now therefore
appointed representatives to meet the Germans at a conference
arranged to take place at Spa, and determined the general lines of
policy within which they were authorized to treat. It was agreed,
for instance, not to acquire certain types of vessels at once, e. g. fish-
ing vessels and vessels under 1,600 tons gross without passenger
acconunodation, and to credit the German Government with hire
for the vessels.
At the same meeting the Council decided to use enemy cargo
tonnage for the relief of liberated territories and enemy countries,
and enemy passenger tonnage for the repatriation of prisoners,
refugees, and troops.
Various precautions were taken to see that the directions of
the Council as to the lise of the vessels were observed, and that
allocation during the Armistice period should not prejudice
ultimate ownership. All enemy ships, for instance, were required to
fly the A.M.T.C. flag in addition to the flag of the Allied country
under whose management they were sailing.
At the same meeting the allocation for management of the
first batch of fifty-three German cargo vessels was arranged
between France and Great Britain ; and the Council noted an
important declaration that Great Britain and America had agreed
to divide equally between them any German long distance
passenger vessels that might fall to their joint share with the inten-
tion of using thetn for the repatriation of their troops.
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LAST DAYS OF THE COUNCIL 229
Last Meeting of the Council
A short and final meeting of the Council, the sixths was held in
Paris on March 10 when France's share of the German tonnage
during the Armistice was agreed, and as Italy's claims were satis-
fied by the Austrian tonnage in her hands the main problems of
allocation were solved.
By this time the Supreme Economic Council, whose personnel
was to a large extent identical with that of the Transport Council^
was at work, and the continued existence of the latter Council
seemed unnecessary.
The Supreme Economic Council on March 24 referred the
question to a committee which met on the same day and recom-
mended that the Transport Council should be dissolved. It pro-
posed, however, that the Transport Executive should be recon-
stituted, should sit in London and take its instructions in future
on questions of major policy from the Supreme Economic Council,
which should in turn be advised by a Sbdpping Committee sitting
in Paris and acting in liaison with the Executive. These recom-
mendations were adopted by the Supreme Economic Council on
April 7, 1919, and the AUied Maritime Transport Council thereupon
ceased to exist.
Henceforward, therefore, the Transport Executive was respon-
sible to the Supreme Economic Council, which was an effective
superior body so long as it continued to meet regularly, that is
till the signature of the Peace Treaty in June 1919. After that, the
Council ceased its r^ular meetings and only met at long intervals.
The Transport Executive then continued its work in a more inde-
pendent position, reporting to the Economic Council when it met,
but in the long and increasing intervals taking such instructions
as were necessary direct from the Ministers of the different Allied
countries.
It must be remembered that throughout 1919 the German
vessels were l^ally held under the Treves and Brussels Agree-
ments, which gave the temporary use of the vessels in retimifor the
supply of food to Germany. During the whole of this period they
were being allotted to the different Allies for use and employment,
both for the carriage of German suppUes tod for other purposes,
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280 AIXIED CONTROL
under temporary arrangements which were specifically not to pre-
judice the final distribution of the vessels under the Peace Treaty.
Once the Treaty was signed, however, with its provision as to the
surrender of aXL large enemy ships to the Allies, questions neces-
sarily arose in the allocation and use of the vessels which had an
interest from the point of view of their final distribution. Whi»i
therefore the Organization Committee of the Reparation Commis-
sion was formed in August 1919 in anticipation of the Conunission
itself, which could only be constituted upon ratification of the
Treaty in the following January, we find the Executive frequently
taking instructions from this Committee. In July 1919 indeed it.
was asked to prepare a plan for the final division of the ships and
to collect all the statistical information which might facilitate it
With the coming into force of the Peace Treaty in January 1920,
all the German vessels were deemed to have been automatically
transferred to the Reparation Commission, and the Commission
established a special department, the Maritime Service, for the
work involved in arranging delivery and distribution. The
Transport Executive thereupon advised the Supreme Economic
Coimdl to disband it. This advice was accepted on February 7,
1920, and the existence of the Transport Executive was thus
formally terminated.
So finished the Transport Council and Executive, not ' foaming
in full body over the precipice ' but ' straggling miserably to an
end in sandy deltas '. They had shrunk and shrivelled, and been
drained of their life and power, long before their formal dissolution.
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CHAPTER Xll
RESULTS ACHIEVED
The fiinction of the Council was to influence the executive action of the
National Govenunents, not to take executive action itself. Allied Food. Allied
Munitions. Italian Coal. French Coal. Belgian Relief. Neutral * Pool Ton-
nage '. Other work. Summary. Limits of the Councils* Success.
We have now followed the general course and development of
the work of the Council and Executive to the end. Before attempt*
ing to draw conclusions for the future of International Administoa*
tion it will be well to review briefly the definite results achieved.
For this purpose we may ignore the months of diminished authority
and activity which followed the Armistice and confine ourselves to
the period of eight months between the first meeting of the Council
and the cessation of hostilities.
It must of course be remembered that the results would be more
accurately described as the work of the several Allied Governments
under the co-ordinating influence of the Transport Council and its
Executive than as the sole work of these latter bodies Every
allocation of the national shipping was made by the authority of
the national Government, and every change in the national
supply progranune was similarly made. The Transport Council
was in form, and to a large extent in effect, an advisory body with
increasing influence but without executive power. The executive
power was vested in, and the great bulk of tiie executive work was
carried out by, the national departments and not by the Allied
organization. The results given, however, reflect accurately the
amount of Allied co-operation and the recognition of Allied needs
by the national depi^tments under the general influence of the
Allied methods and point of view, of which the most important
expression and instrument was the Transport Council. The
principal factor in securing an increase in Italian coal shipments
for example was that the British Ministry of Shipping recogfiized
more adequately in 1918 than in 1917 the Italian need for coal and
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Sm ALLIED CONTROL
gave effect to that recognition by the provision of British tonnage.
The Transport Council itself could not provide this tonnage, but
it could and did secure the consent of the British Government to
its provision : and so with the other requirements for which the
Council accepted a special responsibility and in which it exercised
a special influence.
With this proviso we may review the main effects of the
Council's work.
Allied Food
The Allied system attained its full development in the arrange-
ments made for the Allied food supplies. Before 1918 each
Allied country had provided transport for its own food, partly in
its own ships, partly in chartered tonnage, partly in vessels pro-
vided by Great Britain on no definite and comprehensive plan.
Early in 1918, however, and after the agreement of November 3,
1917, Great Britain began to allot British tonnage for the transport
of French and Italian cereals in exact accordance with the pro-
gramme of wheat allotment agreed to by the Wheat Executive ;
and by the end of the cereal year August 31, 1918, tonnage was
so arranged as to secure the deliveries required.
The Transport Council then accepted a responsibility for dealing
with the whole Allied food programme, including meat, sugar, oil
seeds as well as cereals on the same basis. This widely extended
responsibility was successfully discharged and the full arrange-
ments were put into operation from the beginning of the new cereal
year. The tonnage arranged by the Armistice was such as to
secure imports for every country up to the full cereal allotment,
with a small surplus, and for the other imports with a small
margin of deficiency. The following table shows that the total
maximum deficit for any country was less than 6 per cent.
TONNAGE A RRANGE D BT NOVEMBER FOR DELIVERIES
SEPTEMBER— END DECEMBJSR
Pereentageof Other Perceniageof ToUd
Cereals, BequiremMe. Food, RejtUremenU* Pereeniage,
Franoe . . 922,500 109*8 476,043 SO-7 97-8
Greftt Britain • 2,344,690 114-4 1,588,629 105*2 110*5
Italy. • . 1,037,213 104*2 158,047 59*6 94-8
The provision of this tonnage required the diversion of ships
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RESULTS ACfflEVED 238
under British management (in addition to British ships chartered
by the Allies and mider their control) to the extent of 1,104,000
tons to France and 989,000 tons to Italy.
The arrangements made for food in the first few months of the
cereal year banning in September 1918 represent the most com-
plete example of the working of the AUied system. The food was
bought in common and was divided by agreement of the AUied
food representatives on or imder the Food Council. The credit
required from America was provided on the basis of the pro-
gramme so arranged ; and the ships required from Great Britain
were allotted on the same basis. The range of the supplies covered
was immense ; their distribution involved the problem of measur-
ing the relative needs of different countries in the most difficult
{orm. There was considerable divergence of national interest.
The technical difficulties of allotting suitable ships were greatly
increased by the fact that they were drawn from several national
controls and had to meet the varying arrivals of food in different
loading ports. In spite of this the arrangements were successfully
made and efficiently carried out by both the food and shipping
authorities. It is a most remarkable fact that though the Allies
had 2,000,000 tons less shipping at their disposal and had a new
army to transport and supply from America, their food stocks at
the time of the Armistice were much greater than they had been
a year before.
Allied Munitions
Till the autumn of 1918 tonnage for supplies of munitions
for France and Italy had been allotted on tiie best judgment
that could be formed of the competing needs of the moment.
Emergency arrangements with all their disadvantages were there-
fore frequently required. Considerable tonnage was allotted
to France in the early part of the year to increase her imports
of nitrates and general munitions and, though she suffered from
some deficiency in railway wagons and materials, her position
as a whole was never critical. In Italy, on the other hand, the
munitions position, particularly after the captures of Caporetto,
was very grave. The Allies had no complete information as to
her requirements and had assumed no collective responsibility.
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234 AI JJED CONTROL
A review of the position early in 1918 showed the absolute necessity
tor further imports of munitions. Large shipments were made
both from England and America of steel, nitrates, and general
munitions, and the situation was substantially relieved. In
October the Transport Council accepted full responsibility for
Allied munitions (within the limits tliey assigned) on the saim
basis as for food. Insufficient time had, of course, elapsed before
the conclusion of the Armistice six weeks later for the arrange-
ments to be brought into full working order, but in the interval
the Transport Executive had succeeded in providing all the
tonnage which the AUied representatives desired.
Italian Coal
Under pressure of great difficulties of supply Italy had reduced
her pre-war consumption of nearly a million tons a month to
about 600,000 tons. All this had to be imported, as Italy herself
only produces a negligible amount. In 1917, however, her imports
had only averaged about 440,000 tons a month. She had main-
tained her consumption at 600,000 tons by drawing 160,000 torn
a month from her last reserves of stock. These reserves were
exhausted, and in February 1918 the shipping situation was more
difficult than ever. The position was, therefore, a desperate one.
It was of the most vital importance to secure an importation
averaging 160,000 tons a month more than in the previous year.
The shipment of this extra quantity from the United Kingdom
would have involved the continuous use of nearly haU a million
tons of shipping, and this could not have been found without the
most fatal results on all other Allied supply services.
The problem was, as we have seen, met by the discovery of a
hitherto unutiHzed means of economy. Instead of aU being sent
by the long sea route from the United Kingdom some of the Italian
supplies were obtained from South French mines ; others were
shipped to a Bay port, then forwarded by rail. This enabled
600,000 tons a month to be supplied to Italy with no more strain
upon shipping than the 440,000 tons a month of the previous
year. It was not achieved, however, without the utmost <tifficulty.
The extra strain upon the French railways was very serious,
particularly in view of the demands on them which resulted from
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RESULTS ACfflEVED
S85
the crucial military operations of the year. The closest co-
operation was required between the English coal and shipping
authorities and the French coal and railway authorities. The
scheme was not extended as far as had at one time been hoped,
but the deficit in rail-borne coal was made good in the long sea
shipments. Over the eight months the promised supplies were
maintained within a negligible margin of deficiency, as the follow-
ing statistics show :
ITALIAN COAL
Eight months, March 1918-November 1918.
British coal French coal
passing passing
Shipmenls Italian Italian
by long frontier by frontier by
sea route. rail. rail,
876,195
OosX dispatched •
Progiamme, eight
months •
2,207,732
1,200,000 800,000
854,090
1,360,000
French coal
shipped at
Mediterranean
ports.
820,368
Total.
4,758,325
1,440,000 4,800,000
Of this total 78,494 tons was lost at sea. In addition to the
above suppUes a special miUtary allocation of 160,000 tons of
British coal was dispatched to Italy to constitute a strategic
reserve in case unforeseen troop movements necessitated a sudden
demand upon the coal stocks.
Fbench Coal
The French coal supplied to Italy was provided on the under-
standing that an equivalent amoimt should be supplied to France
by Great Britain in replacement. It was contemplated that this
could be arranged with comparatively Kttle difficulty as the coal
could be sent by the short Channel route to the northern French
or Bay ports. Unfortunately it proved impossible to supply the
extra quantities to France, and the coal she sent to Italy was in
effect a gift without replacement during a period when she was
seriously in need of coal herself. From April to November 1918
France indeed only received an average of 1,365,714 tons a
month as compared with about 1,500,000 tons a month in
1917. Until March 1918 the supply of coal had be«i entirely
a problem of finding the ships. But during nearly the whole
period of the ei^t months in question not shortage of ships but
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236 ALUED CONTROL
shortage of supply and difficulties of discharge were the limiting
factors. The Transport Council, however, did all that came
within its own sphere of competence by providing as much
shipping as could find cargoes and be discharged.
Belgian Relief
Belgian reUef is a good instance of the necessity for an Allied
shipping organization. Food for the relief of the civilian popula-
tion in Belgium and parts of occupied France required the importa-
tion of about 120,000 tons a month. Up till 1918 the Relief
Commission had be«i able to arrange for the transport partly in
Belgian tonnage and partly by chartering neutrals. The control
of neutral tonnage by the Allies, however, had become so complete
by 1918 that the Commission found it impossible to obtain tonnage
any longer by chartering in the world market. The whole relief
arrangements were breaking down and only action by the AUied
Governments could retrieve the position. Their responsibility
was dear ; they were deeply interested in relief being obtained
and the crisis arose directly from the measures they had taken to
control neutral ships. They had indeed passed a resolution at
the Paris conference in December guaranteeing the necessary
tonnage in the name of all the Allies. But the resolution once
passed was entirely inoperative, for no specific responsibility was
assigned to any particular Government and there was no AUied
organization which could deal with a common responsibility and
either discharge or distribute it. By April the relief arrangements
were in a desperate position and seemed destined to coUapse
altogether. For the three summer months it was estimated that
less than half the quantities required could be transported. At
a late and difficult moment, at the end of April, the Council
accepted responsibility and entrusted the task of finding tonnage
to the Executive. Immediate measures were taken. Emergency
supplies were hurried across from England ; 100,000 tons of
shipping were provided by America and Great Britain in equal
shares ; and as soon as the tonnage which was at the time being
acquired from Sweden on condition that it was engaged on
^ non-war zone work ' could be brought into use, it was allotted
in priority to Belgian relief, and the service was thus put on
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RESULTS ACfflEVED 237
a satisfactory basis. In spite of the late and difficult start the
position was retrieved and by November the full programme had
been carried out within a small margin of 7 per cent., and even
this small deficit would have been met by about the end of the
year.
BELGIAN RELIEP
Pro^jramme, ExecuHcn.
Tons. Tons.
June-Angnst .... 360,000 384,070
September-November . . . 396,300 300,610
755,300 694,680
Neutral Tonnage
The AlUes entrusted the neutral tonnage which they chartered
to the control of the Transport Council. The Executive arranged
a general plan under which this tonnage was allotted among the
coal and wheat services in such a way as to secure the maximum
advantage from the different types of vessels, and detailed arrange-
ments in accordance with this plan were made by the Inter-
Allied Chartering Executive. In November the tonnage ?o
controlled was distributed as follows among the different services :
Tons,
Coal to France 111,265
Coal to Italy 135,343
Wheat Executive .... 99,342
Belgian Relief 9S,572
BfiBoellaneous 35,815
480,337
This half miUion of tons was the only ' pool of tonnage '
under Allied control in the fullest sense. It alone was under the
direct orders of an AUied authority. The Executive in arranging
this neutral tonnage did not use it as the adjusting element in
the transport programmes. They could only have done this if
all the supply programmes had first been both agreed and reduced
to within the total capacity of the tonnage under AUied control.
Without the prior completion of this work, an attempt to use
the neutral tonnage as the adjusting factor would have involved
difficulties in every allocation of a ship. The safer course was
therefore taken of assigning the tonnage to services which every
one agreed must at least have much more tonnage than the neutral
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238 ALUED CONTROL
ships assigned, and of leaving the main adjustments to be made
on the national tonnage.
Otheb Work
In spite of drastic reductions which had been necessitated
in the food and munitions of the European Allies the Transport
Council authorized the allocation of British tonnage to assist
Anierican military supplies. The tonnage provisionally indicated
was 200,000 tons for loading in October and a further 300,000
tons in November and December together, this quantity being
variable at the discretion of the Executive. The tonnage actually
allotted in October was 204,000 tons, and arrangements had been
made to allot 150,000 tons in November ; but the later allocation
was, .of course, changed as a result of the Armistice.
The Allied organization was least complete in relation to the
raw materials for articles of civiUan consumption. The conmion
interest was less and the divergence of interest greater. The
wide range and intricacy of the articles in comparison with the
relatively small total tonnage involved naturally had the effect
of postponing this part of the work until the vital pn^rammes
were in full operation. Italy's raw materials requirements, outside
coal and food, only amounted for example to one-thirtieth of her
total imports. While, therefore. Programme Conunittees were
established, they were never co-ordinated under a Raw Materials
Council corresponding to the Food or Munitions Coimcil, and
though their progranunes were a useful aid in the allocation of
special assistance from time to time, they were never accepted as
the basis of an automatic cdlocation of tonnage on the wheat
system.
The statistical section throughout the later part of the year
compiled monthly statements showing the losses, the building, and
the employment of all ocean-going tonnage in the world. Hie
tables diowing the position before the Armistice^ which are more
complete than any statement of the employment of world tonnage
either before or since, are reprinted on page 364.
The Executive also effected a great number of detailed
economies in the use and ^nployment of tonnage of which instances
have been given in the preceding chapters. Vessels were changed
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RESULTS ACHIEVED 239
from one Allied service to another or from distant to nearer
employment ; and economical arrangements of light and heavy
cargoes were secured by pooling the requirements of the different
Allies. The many advantages derived from pooling the tonnage
required for all the services of a single coimtry (as described in
Part n) were increased by extending the pooling and widening
the area within which economies could be looked for till the
whole field of AUied progranmies was included.
SUMMABY
In the brief period of exactly eight months therefore, which
elapsed between the first meeting of the Council on March 11
and the cessation of hostiUties on November 11, the supply
arrangements of the AlUes were completely transformed.
A new organization covering the whole range of imported
commodities was built up and got into working order. Apart
from the Allied Maritime Transport Council itself, the Inter-
Allied Munitions Council and the Inter- Allied Food Coimcil (each
with its permanent organization), twenty Programme Committees
were estabUshed.
The import services of France and Italy were put upon a
substantially satisfactory and substantially equal basis. Food
stocks were raised to a much safer level. The Belgian Relief
requirements were met^ the American miUtary programme
assisted, 600,000 tons of neutral tonnage directed, and many
detailed economies in the employment of AUied tonnage were
effected.
Tbese results were secured in a period when the stringency
of the general tonnage situation was continuously increasing.
The European AUies in the cereal year 1917-18 lost about
2,000,000 tons d.w. more than they had built, while the excess of
American building over American losses was much less than the
additional American miUtary demands.
The results achieved, therefore, dmring this short period of
ei^t months were sufficiently striking. It is important, however,
to note their limits.
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240 ALIJED CONTROL
Limits op the Council's Success
Li the first place, the earliest results were achieved in sudi
services as Italian coal and Belgian Relief, where a cai:ain pro-
gramme was agreed beforehand as a bare minimum which should
have a real priority over other claims on tonnage. It was recog"
nized that whatever the claims of competing supplies Italy must
have 600,000 tons of coal a month and Belgian Relief 120,000
tons of imported food. It was difficult enough to arrange shipping
for these quantities ; it would probably not have been secured
without the Transport Cotmcil, and the successful acquisition of
the ships was a real achievement. But the common agreement
beforehand on a programme which at the same time included
only a bare minimum supply, but for that minimum could claim
a definite priority, narrowed the problem. It was unnecessary
to use the machinery of the Programme Committees to balance
the current needs of Italian coal against the competing claims of
other countries, or of Belgian food against the competing claims
of food for France, Italy, and Great Britain. It was, therefore,
possible to begin at once without waiting for the establishment
in full working order of the Programme Committees.
A similar consideration applies to the direction of the neutral
tonnage. It would have b^n theoretically possible to use this
tonnage as the adjusting element in the Allied supply services ;
to have sent it wherever, in the view of the Executive, extra
assistance was required for any national service for which the
national ships were insufficient. This would have involved,
however, an agreement by the Executive on a general system of
distribution programme or the consent of all its members to each
detailed allocation. The Allied machinery was not developed
sufficiently for this method to be adopted. The difficulty was^
as we have seen, circiunvented by allotting the tonnage on
technical considerations of its suitability. This was a wise
decision in the circumstances, but it again implied that the
Allied machinery for the current comparison of completing supply
needs was not in full working order. In a sense, therefore, the
Gordian knot was cut for these three services, and it was thus
possible to put them into full operation in March, while the Allied
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RESULTS ACHIEVED 841
maehin^ry was incomplete. The earliest tonnage results were
therefore secured, and the arrangements were in full operation
throughout the eight months.
The position of food was very different. The full Allied
principle was put into force for wheat from March and for all
foods from the beginning of the cereal year 1918-19 (i. e. from
September). Here the Imot was not cut by any general priority
of an agreed minimum — ^the size of the programme was too great
for any such expedient. The full Allied principle of the com-
pariscm of the Allied food programmes, through the Programme
Conmiittees imder the control of the Food Coimcil, was put into
operation, and tonnage was allotted in accordance with the pro-
gramme so agreed. Here the Allied organization was seen in its
most complete development and at its highest point of efficiency.
It followed naturally, however, that the system took longer to
get into full working order. It was only from September that it
apphed to all food, and the tangible results were therefore limited
to the next two and a half months between this date and the
Armistice. At the same time the size of the problem made the
achievement, even though for a shorter period, of the first impor-
tance.
The same system was developed somewhat later for munitions
and only b^an to operate fully just before the Armistice. It
had not been brought into full working order for raw materials.
By the Armistice, therefore, we see the AUied system tested
and working efficiently, though only for a short period, for one
of the great supply programmes, food; b^inning to work on
the same basis for the second, munitions ; but still in its prepara-
tory stages for the third, the miscellaneous raw materials for
civilian use.
There is one other limiting consideration, however, of the
greatest importance to be taken into account for the whole of
the Transport Coimcil's work. It was calculated, when the
Council was formed, and rightly calculated on the basis of the
military position at the time, that the principle of equal sacrifice
would result in two countries. Great Britain and America, and not
the former alone, allotting tonnage to France and Italy. The
miUtary disasters of the spring of 1918, and the consequent
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»4& ALLIED CONTROL
increase in the American Army, upset this calculation. Through-
out the war Great Britain alone was using less than the total
of her tonnage for her own military and civilian requirements, and
was supplying tonnage to her Allies. As a result of this there
was bd^d all the discussions of the Programme Committees,
and of the Transport Coimcil, a power of decision vested in a single
authority, the British Government, which could compel observance
of a programme it considered reasonable, whether agreed or not,
by a refusal to allot British ships except on specified conditions.
This power was for the most part in the backgroimd, but the
fact tiiat it existed and was Imown to exist must be noted €is
a factor to be taken into accoimt in estimating the AlUed achieve-
ment. The system would only have been fully tested when
America and Great Britain were both providing tonnage for
France and Italy and when agreement was therefore not merely
desirable but an indispensable condition of action. This situation
would have arisen in 1918 but for the increase in the American
Army, andin the spring or summer of 1919if the war had continued.
The writer, and others associated with the AlUed organization,
are convinced that it would have stood the strain. America had
not only associated herself fully with the Allied system by her
engagements of October, but had given an earnest of her intentions
by the executive orders issued immediately afterwards. But the
fact must be chronicled that the Armistice exempted the AUied
organization from its final test.
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PART V
INTERNATIONAL ADMINISTRATION i
CHAPTER I
THE DIFFERENCE BETWEEN THE WAR AND
PEACE PROBLEM
Limitations of the War Organization. Its motive power only possible in
war. The Problem simplified through the special and temporary position of
Shipping during the war. The nature of the War Achievement. The Allied
Oiganization controUed the action without displacing the authority of the
National Governments. The difference between Economic Control and Military
Command. ,
The Allied organization of the war is ended. Its work, or all
the most important part of it, ceased with the Armistice of 1918,
a few months only after it had been effectively begun. If it is to
have any continuing utiUty, it must be through the experience
it has given of the methods and machinery through which inter-
national co-operation can find its most effective expression. The
need for international action remains and will remain. It may,
indeed, grow continuously until a large part of the government
of the world is effected through a world rather than a national
machinery. In this development, the discovery of the right
methods of administration will prove one important condition
of progress.
The conditions of the war, and the imperative need for imity
of Allied action in face of a common enemy, created a kind of
hothouse in which international co-operation, normally a delicate
plant of slow and precarious growth, developed in a few months
to a completeness of form and structure which it must otherwise
^ Note.— The reader is reminded that, as stated on page x, * the acceptance of
a monograph in this series does not commit the editors to the opinions or con-
dusions of the authors. ... In like manner the publication of the monographs
does not conunit the Endowment to any specific conclusions which may be
expressed therein.' J. T. S.
R 2
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244 INTERNATIONAL ADMINISTRATION
have taken many years to achieve. . If, therefore, we can eliminate
some of its purely temporary and accidental features we may be
able through this forcing experiment to see something of the
probable and desirable development of the future.
Let us b^in by recalling some of the necessary qualifications
and discounts which we must have in mind when we try to draw
our conclusions.
The Motive Powee of Inteenational Action
In the first place we must remember that no perfection of
machinery can dispense with the force of pubUc will and desire
upon which all international action depends as its primary and
essential condition.
In the war this impulse came from the imminent and obvious
conunon danger. In peace and for the purposes of peace no such
intense and concentrated impulse is possible. It must come, if
it comes at all, from a generous desire to promote the well-being
of other countries and other classes, without too close a reckoning
of immediate interest. It can no longer derive its force from
the strongest of all instincts, the instinct of seU-preservation ;
but it must still be strong enough to give driving force for action
and to make possible the surrender of national or personal interest
which will be involved. Almost all international action requires,
for its first step, some sacrifice on the part of those with whom the
power of first action rests. Its ultimate result may indeed be
of advantage to them. The grant of credit to an impoverished
coimtry may save the lending country from unemployment. The
surrender of a monopoly of raw materials may result in a general
increase in production of which the country originally possessing
the monopoly will itseU reap its share. But the prospect of such
an ultimate advantage is always remote. The first form in which
proposed action always presents itself to the coimtry of whom the
general situation demands action is sacrifice of immediate
advantage. The bread that is cast upon the waters may indeed
be f oimd, but only after many days. To make such initial sacri-
fices possible, there must be a strong and generous impulse of
pubUc goodwill that is more difficult to create and to maint^iin
than the force which gave unity in war.
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DIFFERENCE BETWEEN WAR AND PEACE PROBLEM 246
But not only was the driving force of international action in
war derived from a source which cannot be found in peace ; the
Allied administrative problem was concentrated and simplified
by the position of shipping under the particular conditions of the
submarine campaign. Normally, any international action requires
a careful balancing of many considerations, poUtical, financial,
economic, humanitarian, and therefore the consent and co-opera-
tion of all those who represent these different factors. In 1918,
however, the problem of the AUies was simplified by the fact that
the need for ships outweighed almost every other consideration.
SuppUes, and the money to buy them, might both be less than
they would have wished. But there were always during this
period more suppUes and more money to buy them than ships
to transport them, and without transport to the field of conflict
the possession of supplies was useless.
This not only gave a criterion by which to test a policy, it
involved a concentration of authority in those who controlled
shipping through which it was comparatively easy to effect
co-ordination of the whole AUied organization. Here again, no
similar conditions can be expected in peace. If common action
affecting the suppUes of half a dozen coimtries is proposed, it will
be insufficient, it may even be irrelevant, to secure the agreement
of those who control shipping or any other single department of
administration.
The war problem was indeed even simpler than this. The
shipping authorities of a single country were able to exert a com-
pelling influence on the Allied supply programmes because they
alone were giving ships to their AUies and were able, therefore,
in the last resort to attach conditions to their gifts. The final
test of the AUied organization would have come, as we have seen,
in the spring of 1919 when America as weU as Great Britain would
have been in this position.
We find then, even in this completest expression and instru-
ment of AUied co-operation, certain limiting factors in its develop-
ment and certain accidental advantages at the basis of its success.
Much, however, remains even when we have made these
qualifications.
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24t> INTERNATIONAL ADMINISTRATION
The Nature of the Wab Achievement
Let us recall the essential character of the administrative
achievement.
Above all, the AUied oi^anization solved the problem of
controlling the action, without displacing the authority, of
national Governments.
Unity of action could not be achieved in the economic, as it
was in the miUtary, sphere by the appointment of a generalissimo.
There were, indeed, many who suggested this solution in 1918,
but they had Uttle appreciation of the realities of the situation.
Economic control is a very different thing from military conunand.
A soldier, from the moment of his enUstment, leaves the lax and
infinitely varied restrictions and influences of civilian life; he
becomes subject to a rigid miUtary discipline; he is part of
a regular and uniform organization. He is a fragment in a pyra-
midal structure whose apex is the highest command. The whole
machine of which he forms a part has its single and special task
clearly separated from the general civilian life of the world; and for
its own piu:pose it is imder a single and supreme control. Each of
the national armies required to co-operate in a single campaign
has a similar piu:pose and a similar organization. The unity of
interest of all of them makes it, not indeed easy, but relatively
easy, to subordinate all to one conunand. Once the decision of
principle is taken, the similarity in the organization of all armies,
the hierarchic character and miUtary discipline of that organization
make the decision a simple one to translate into practice.
Economic control is entirely different in both its scope and its
character. It penetrates and permeates the whole commercial
and civiUan life of a nation. A reduction in a sugar programjne
not only changes the problem of the official department
controlling food suppUes; it affects the work and the interests
of the commercial organizations through which that department
works ; it goes farther and alters the habits of life of every house-
hold in the coimtry. It is something of which both oi^anized
interests and the millions of the consuming pubUc feel the effect
directly and on which they consider themselves competent and
entitled to express an opinion and exercise an influence. Military
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DIFFERENCE BETWEEN WAR AND PEACE PROBLEM 247
action may, in fact, affect them as seriously ; but it is more remote
from their experience and enjoys the protection of an expert
knowledge to which they make no claim.
Economic control, again, is essentially local in its character.
The soldiers of a dozen nations may be taken from their homes
and flimg into action in a single field of battle. The sources of
military strength are scattered but its exercise in action is con-
centrated. But the reduction in the consumption of butter or of
bread, the change of one article of diet to another, the substitution,
the transference, the rationing of raw materials, must operate
where the consuming pubUc lives, where the industry is at work ;
all are, in their very nature, rooted in the civilian life of the several
countries. Its executive machinery is necessarily local and
national ; it cannot be transferred or denationalized.
The national organizations through which economic control
is exercised reflect these conditions. By comparison with armies
they are amorphous and varied in structure, lax in discipline,
slow and often fumbling in executive action. They are, indeed,
as multiform as the complex conditions of the life and activities
they control. At the top perhaps is the official authority of
a Minister or pubUc department. But around this small nucleus
of purely official authority, there is probably a conunittee or
commission formed of the business men whose commercial
experience is required and incidentally whose conunercial interests
are affected. The decisions of the authorities so variously con-
structed may have to be translated into action through the whole
democratic machinery of mimicipal bodies, through voluntary
associations, and, in the last resort, through the individual shop-
keeper and the individual consumer. Economic control in war
is indeed co-extensive with the conunercial and civiUan life of the
country. It must be elastic enough to suit the infinite variety
of that life. It is largely based upon the commercial and private
interests it controls, and it expresses as well as controls those
interests.
In these conditions it is probable that no human brain would
have been adequate to the problems, no human character adequate
to the responsibilities, of single and supreme command. It is
certain at least that no one could have acquired the impUdt
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248 INTERNATIONAL APJONISTRATION
ccmfideace of all the Allied nations required to make his authority
effective. An economic generalissimo was never possible.
Nor was the solution to be foimd in a joint executive board
with delegated power. No country could have del^ated to an
Allied body, acting by a majority vote, an authority over all
civiUan life. If executive authority had been given on condition
of unanimity, a national delegate would scarcely ever have been
prep€u:ed to agree to action adversely affecting his own coimtry's
interests without the assent of his Government. If he had
authority to do so and exercised it, he would be overriding the
responsible Ministers of his coimtry in their own sphere. An
executive authority, even if conceded in princifSle, would, in these
circumstances, have inevitably broken down in practice.
But if an executive authority was impossible, a mere advisory
body of Delegates chosen on the usual principles would have been
ineffective. National Ministers in their several capitals, harassed
by the overwhelming pressure of their daily problems, would have
been unlikely to accept the advice of Delegates working at a
distance and necessarily knowing less of their national difficulties,
even though they knew more of the Allies' position as a whole.
This was the problem which the Allied organization had to
solve, and did in fact solve successfully, during the war. It is by
considering the principles on which that organization was built,
with due allowance for the special conditions which ended with
the war, that we shall best see how much of its experience can
be utilized for the problems of peace.
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CHAPTER II
PRINCIPLES OF INTERNATIONAL ADMINISTRATION
The main principle of the Allied Organization. The Limitations of Con-
ferences. The Executive Organization. The Prindple of Direct Ck>ntact. Its
relation to the Principle of the League of Nations. Its dangers and its merits.
Decentralization in Foreign Relations. Maxims for the use of Ck>mmittees.
Summary of Principles of International Administration.
The hindamental principle of the organization by which the
problem of economic control was achieved, imder the difficulties
indicated in the preceding chapter, was to constitute the coimcils
and committees of which it consisted by the appointment, not
of representatives with delegated power, but of the actual Ministers
and officials responsible, in their several coimtries, for the executive
action required.
This principle practically destroyed the distinction between
the advisory and the executive. The coimcils were, in principle,
advisory. But if the French Minister of Munitions, as a member
of the Munitions Coimcil, or the British Shipping Controller, as
a member of the Transport Council, assented to a resolution
involving executive action by the departments for which they
were responsible, action, of course, followed quite as certainly
as if the resolution had had an expUcit authority and had been
mandatory in form. Each Minister would, in his national capacity,
issue the executive orders required to give effect to the recom-
mendation to which he had assented, in his international capacity,
as a member of the Council.
The Limitations of Conferences
The formation of Ministerial Councils on this principle,
however, though an advance, was not in itself sufficient. Even
in peace, and still more in the earlier stages of the war, conferences
of Departmental Ministers of the several coimtries had been
arranged and had taken the place of formal and indirect n^otia-
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250 INTERNATIONAL ADMINISTRATION
tions through the Foreign Offices. The development of such
Conferences into Councils with a regular constitution and periodical
meetings would have been useful, but not in itself decisive. The
Coimcils would have suffered from the same defects as the Con-
ferences. Such meetings may have the necessary autiiority for
decision but they are ill equipped with the detailed information
and with the administrative machinery required if the problem
is intricate and complex in character and requires continuous and
co-operative executive action. Ministers meet for a day or two
and return. Their responsibility covers a wide field and their
knowledge is, therefore, general rather than specialized. If they
bring speciaUsts and detailed plans with them, these plans will
have been worked on separately in the different coimtries, and
it will be impossible to adjust them and mould them into one
workable plan in the brief time available at the Conference^
Probably agreement will be reached by means of a general and
over-simplified formula which will not in practice be found to
answer most of the questions needing decision in dcdly executive
action. Even if a satisfactory plan is agreed while the conference
is meeting, modifications will be required without the machinery
to achieve them. Negotiation is then likely to be thrown back on
to the old methods of commimication through Foreign Offices
which, as has been explained, are slow, formal, and inadequate to
the necessities of the work.
Thi: Executive Organization
Behind the Coimcil of Ministers the executive departments
which they controlled in their several coimtries were, therefore,
themselves linked together, and formed into an instrument of
continuous international work, by the creation of Committees
and Executives of officials on the same principle as the Coimcils.
The Committees, like the Councils, consisted of the actual persons
who in their own departments, and within the limits of their
personal duties, possessed both expert knowledge and either
direct executive authority or effective influence over departmental
action.
The crucial development of the Allied organization was the
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PRINCIPLES OF INTERNATIONAL ADMINISTRATION 261
extension of the principle of direct contact throughout the national
controls, the formation of a machinery through which contact
was regularly effected, and the linking up of the whole system by
the continuous work of the immediate staff of the big Coimcils
and particularly of the Transport Coimcil.
We have seen how Allied Programme Committees, ultimately
twenty in number, covered the whole range of imported conunodi-
ties and (in addition to their non-shipping duties) prepcured pro-
grammes of the shipping required for submission to the Transport
Council through the transport executive. The members of these
Committees were essentially national ofl&cers whonnet in con-
ference, or in constant €issociation, for international work. In
their own departments they represented the international point
of view ; in Allied meetings they represented the national point
of view. And the agreement they arrived at in Allied discussion
they carried into practice through their national departments.
Thus the new Allied principle did not override or replace the
national organizations — it penetrated them. It linked them
together from inside. The Allied authority consisted of the
national authorities themselves associated for a common piu:pose,
influenced by a common point of view and securing results through
the executive action of the national systems.
This wfts the climax of the development by which co-operation
between the Allies shifted gradually from a diplomatic to an
administrative basis. We have seen how, before the war, negotia*
tions between the British Board of Trade and the French Ministry
of Commerce would pass through two Embassies or Foreign
Ofl&ces en route in both directions ; how the question asked of
a specialist in London and the answer of the corresponding
specialist in Paris would be transmitted, and perhaps transmuted,
by two sets of necessarily non-specialized brains and pens. We
have seen the slow and tentative process by which these methods
were gradually transformed imder the increasing need of Allied
co-operation. Departmental Ministers met in occasional con-
ference and dealt direct with each other and not through their
Foreign Ofl&ces. The whole system was made more workable in
practice, though not transformed in principle, by the establish-
ment of the Commission Internationale de RavitidUement which
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252 INTERNATIONAL ADMINISTRATION
relieved Allied representatives of the formalities of diplomatic
negotiations but left them still cut off from direct contact
with British departmental officials. Then the paramount exi-
gencies of the wheat and shipping problems forced the develop-
ment further. Members of the AUied food departments met in
direct association to allot the available wheat among th^nselves
and to buy it in common. The British shipping authorities
negotiated shipping arrangements direct with the corresponding
authorities in France. But by this time shipping had become
more than shipping ; it had become the limiting and therefore
the determining factor in all suppUes. The British shipping
authorities by allotting so many ships and no more to France
and to Italy were determining the limits of the French and Italian
imports. In doing this they were scarcely more expert than
supply representatives would have been in settling the allocation
of ships. And so at last the final stage was reached. The supply
departments of the different coimtries were themselves linked
together from within.
The national administrations now touched each other, not at
one point (the Foreign Offices) nor at half a dozen (the Ministers
of the main departments) but at scores (the officials and experts
responsible for the detailed controls). And the contact was no
longer occasional and irregular, but continuous. The French
representative no longer met the British and AUied representatives
to discuss a wide range of different subjects under n^otiation
between their countries. The French wool official dealt with the
British and ItaUan wool officials and was not concerned with
what his colleagues for cotton or timber or coal were discussing
in other committees with the corresponding experts.
Thus the international machine was not an external organiza-
tion based on delegated authority ; it was the national organizations
linked together for international work and themselves forming
the instrument of that work.
It is mmecessary here to describe again the details of this
system ; the methods by which the geographical difficulties were
met ; the varying executive influence and authority of the com-
mittees ; the differences in the choice of personnel to fit the
exact requirements of the several controls and countries ; the
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PKINCIPLES OF INTERNATIONAL ADMINISTRATION 253
way in which the system was knit together and co-ordinated by
the Transport Council through the Executive.
But it is necessary to draw attention to the immense import-
ance and wide implications of the vital principle of international
administration which was thus discovered and applied — ^the
principle of direct contact between specialists.
The Principle of Direct Contact
Let us explore the range of this principle.
International administration is of two kinds. It may be
concerned with a specific piece of work of an international character
definitely entrusted to it by a number of Governments, who dele-
gate to it the full authority required for its execution. In such
a case the administrative problem is a simple one. The officials
are doubtless drawn from several nationaUties, but they can be
welded into a single and coherent executive body, canying out,
with full power, a definite piece of work in the same way and with
the same organization as any national department. Unless and
until, however, the government of the world is profoundly altered,
such work is bound to be limited in character, in scope, and in
importance. The affairs of a Danube Commission may be so
managed. Work of scientific investigation not involving executive
action may be delegated to an International Institute of Agri-
culture. A specific piece of executive work, such as the control
of a block of chartered tonnage in war, may be entrusted to
a body Uke the Transport Council formed primarily for wider
work ; or a particular task such as the collection of reparation
under treaty provisions may be given to a specially formed body
like the Reparation Commission. But if the work seriously affects
the national interests and national policies of several countries,
the necessary authority will rarely be given, and if given, it may
be threatened with withdrawal.
If, therefore, international administration is to deal with affairs
of the first importance in the world, it will be of a second and very
different type. It will work through the executive organization
of the national Governments. It will influence, co-ordinate,
perhaps control, their work. But it will not replace them. It
will obtain its power, not from an authority confetred by delega-
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254 INTERNATIONAL ADMINISTRATION
tion, but by continuous pressure and influence on the centres of
national power. It may bring to bear on these national points
d^appui the whole of the force it can obtain from any public
opinion derived from any or aU countries. It will move them by
bringing each within the sphere of the others' influences. Some-
times its objects may be achieved merely by securing that national
decisions, even if still made nationally and on national grounds,
are made after full recognition of their effect upon other countries
and of other coimtries' views and opinions.
When this is the nature of the task, and this the nature of
the power, the method of direct contact over a wide surface,
of linking these departments together by the association of their
crucial ofl&cers, will prove more effective and successful than any
form of external influence or control. The method is capable of
infinite variations for particular needs, but in one form or another
it will be appUed to most of the really important work touched
by international administration. It is the fimdamental and
essential method for aU international work that requires the con-
tinuous co-operation of national administrations.
This principle, valuable as an instrument of administration, is
the more interesting and important because it is in accord with
the fimdamental purposes and policy of the League of Nations.
The League stands for the policy of broadening the bases of
international relations. The devdopment in government which
resulted in the late war was largely a process of over-centrahzation
and over-concentration. The whole strength and activities of
great nations were controlled and dominated by national policies ;
their economic development was directed, even their intellectual
thought and education inspired, by a central policy distorted by
a single bias. The growth of central government, the improve-
ment in the very mechanism of international communications —
the cables, the telephones, the rapidity of transport, the distribu-
tion of papers and documents^-concentrated the contentions and
frictions of a whole world in a small number of dangerous centres
of power. Under this process, the body politic became abnormally
and dangerously sensitive. The controlling brain was too re-
sponsive to local irritations, too much disturbed by trivial troubles
of which, in a healthier state, it would have been unconscious. In
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PBINCIPLES OF INTERNATIONAL ADMINISTRATION 256
the innumerable contacts of one nation with another, of the
citizens of different countries in their commercial activities, there
are bound to be causes of quarrel, divergencies of interests,* friction
of every kind. In an over-centralized and over-nationalized
system, too many of these casual and often trivial troubles become
dements in international relations. An economic dispute is no
longer a quarrel between traders, it becomes the subject of n^otia-
tion between Governments. The tension in the centres of excessive
power increases, and the more the activities of the world are
identified with national administration and incorporated in
national policy, the worse the tension becomes, till at last it
proves unbearable.
The war broke this tension, and the institution of the League
of Nations, with its principles of pubUcity and open diplomacy,
is an attempt to take public policy away from the few over-
strained centres of excessive power, and to base it boldly and
broadly on the general wishes and will of the peoples of the world.
It is morally a great effort of faith. It is, in one sense, adminis-
tratively a great effort of decentralization. It replaces centrahza-
tion by co-ordination.
Everything that throws the activity and interests of the world
outside the circle of national frontiers and national poUcy is a step
in this direction. Whenever the citizens of different countries
meet on a basis of conunon interest that transcends or cuts
across national frontiers — ^whether they are scientists, or school-
masters, or financiers, or trade unionists — ^whenever oi^anizations
develop on lines determined by their special purpose, science,
education, or finance, or labour conditions, and draw their members
indifferently from every country, the basis of international rela-
tions is broadened and international amity no longer rests pre-
cariously on purely poUtical foundations.
Similarly too, to take an example from among the current
economic activities of the world, if an EngUsh shipping company
quarrels with an American company, it may be regrettable but it
is not important. But if the Governments make the quarrel their
own, the vital interests of the public are in danger.
And even within the sphere of official relations a similar
principle appUes. If it is better that an English shipping com-
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256 INTERNATIONAL ADMINISTRATION
pany should settle its affairs direct with an American shipping
company, it is probably better, if the Grovenmients must take
a hand, that an American Shipping Board should deal with tlie
British Ministry of Shipping, raflier than that the affair should be
handled by the State Department and the Foreign Office. In tlie
first case, any difficulty ranains comparatively technical in
character and localized in effect. In the latter case, it neces-
sarily becomes an element in the poUtical relations of the two
countries.
It is true, of course, that when points of contact are multipUed,
occasions of friction increase. The very formalities of diplomatic
procedure stifle at birth many nascent dissensions. The trained
skill, the tradition of caution and restraint in language, prevent
the unnecessary friction that often arises when those with no
such skill deal with issues whose dangers and difficulties they do
not fully appreciate. It must be expected that if national adminis-
trations touch each other at many points, incidents will frequently
arise, just as in a wider sphere, with the methods of open diplo-
macy, the press of the world may make international disputes out
of many trivial incidents which, under the old system, were
settled quietly and easily between diplomatists. But these
incidents, when they occur, will be less important if half a doasen
departments are conducting their negotiations in their own
special spheres, one country perhaps gaining advantage here and
another there, and each without relation to what has happened
in other departments. Such troubles as do arise have a much lees
serious significance. Better many localized disputes than a tew
which affect the general poUtical relations of the two countries.
And it is something, too, to have a safety valve for sudi real
differences as do exist ; a procedure which suppresses them has
its own dangers. Those who took part in the AUied war controls
were fully conscious of the special dangers of the increased oppor-
tunities the system gave for dissension, but on the whole they
probably felt in time that the advantages were even greater.
Certainly the danger grew less and the advantages increased
when a long association in work began to bring confidence and
mutual respect.
In the intricate and difficult n^otiations that have taken
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PRINCIPLES OF INTERNATIONAL ADMINISTRATION 267
place since the war there is, too, I believe, a clearly discernible
tendency to regard bargains not in pari materia (such as a
su^estion that an economic concession here should be given
in return for a quite irrelevant political concession there) as
essentially unfair. The more specialized the subject-matter the
stronger the feeling. To use a concession as to the price of coal
in order to obtain agreement as to colonial policy becomes more
and more repugnant. The aggrieved party in any such bargain
b^ins to term it blackmail. And behind tlids slowly and painfully
a new idea— -which may ultimately prove the hope of the world —
begins to form and find expression, the idea that even a par-
ticular negotiation should not be of the nature of a bargain ;
that there is for most questions somewhere a just solution in-
dependent of the relative strength of the contending parties, and
that the question should be settled on these its intrinsic merits.
Let us then attempt to summarize briefly the main rules which
emerge from the application of the main principle explained above
to the practical work of international administration.
1. Where international work requires the continuous co-
operation and executive action of several Governments (and the
most important work does require them), it is essential that the
responsible authorities in the several national administrations
should be brought into direct contact with each other. No
external organization can effectively control and co-ordinate their
action.
2. This direct contact will sometimes take the form of con-
ferences or councils of departmental ministers dealing directly
with each other and not tlurough Foreign Offices.
These meetings will secure the necessary authority for action,
but in themselves they will not be sufficient if the work is intricate
and consecutive in character, because they will be necessarily
brief and irr^ular.
3. Contact, and indeed regular contact, must therefore be
established between the appropriate permanent officials of the
several national administrations. It is important that these
officials should (where possible) continue to exercise executive
authority in their own departments, and, where geographical
reasons prevent this, that they should at least be specialists and
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26a INTERNATIONAL ADMINISTRATION
continue to exercise a decisive influence on them. The officials
must enjoy the confidence of the respective Ministers, must keep
in constant touch with their policy, must within a considerable
range be able to influence their action, and they must have an
accurate knowledge of the limits of their own influence.
4. These officials must work together enough to know each
other well, to develop mutual trust and confidence, or at the
worst to judge accurately the limits within which they can trust
each other. They must in their own national departments repre-
sent the international point of view, and in their international
organization they must represent the national point of view. It
is quite as important that they should continue to understand
and to influence their national pohcies, as that they should learn
to understand and be influenced by the international point of
view and the policies of other countries.
5. The officials of the different countries so working together
must try to develop such relations as will enable them, without
disloyalty to their own countries, to discuss policy frankly in its
earlier stages and before it has been formed and formulated in
their respective countries. This is a matter of th# utmost delicacy
and of the greatest importance. A number of countries start
considering a problem with certain initial differences of outlook
and divergencies of interest. If the problem is worked out
separately in each national administration the divergencies are
developed and increased ; each Grovemment takes a definite
position, and begins to feel that its prestige is injured by any
modification in it. In such conditions a solution is difficult, and
tends to be reached only by a method of bargaining based upon
relative strength. But if in the earlier stages frank and non-
committal discussions take place between the officials who advise
the ministers before the poKcy has been formulated, and before
any Government has committed itself to a definite position, it is
often possible to arrive at a common solution which will be
accepted in the first instance by each Government as its policy.
No Government need then retreat from a position to which it has
committed itself. If the poUcy is developed in this way, con-
siderations of justice as distinct from bargaining strength, have
at least a better chance of prevailing. Both poKcy and administra-
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PRINCIPLES OF INTERNATIONAL ADMINISTRATION 269
tion become international by a process of permeation and penetra*-
tion of the national administrations.
6. The necessary authority is bJest secured by the occasional
meeting of the responsible Ministers, and executive action by the
more frequent association of the officials who work out their
plans together, and mould and adjust policy in the actual process
of formation. For work requiring the action of national depart-
ments ' internationalized ', not ^ denationalized ', persons are
required, and the respective authority of both the responsible
Ministers and of the officials must be directly engaged.
7. Under this organization, committees are in their right re*
lation to administration. Nothing is so ineffective as a committee
which consists of persons each of whom has no speciaUzed function
and no personal executive authority, and yet tries to direct
executive action. But if a number of persons, each of whom has
a direct executive authority which he continues to exercise in his
own special sphere, meet from time to time in order to dovetail
their several measures and adjust them to a common plan, and
then return to their departments to put into effect what they have
agreed, the committee is an effective instrument of co-operative
action.
8. The proper function of formal meetings of international
representatives is not to work out a common plan or to secure
agreement by discussion, but to endorse a plan already prepared,
to ratify agreement already secured by less formal methods, and
to give the authority required for its execution.
These are a few gleanings from one field of experience. The
discovery and development of the principles of international
administration under the conditions of peace is a work that still
remains for the future.
The Function of Committees
Though the development of the principle of direct contact
(and of decentraUzation) is much the most important contribution
made by the AUied war organization to the science, or art, of
international administration, there were other features in it
which may have some lasting value. Most of these indeed merely
enforce once more sound principles which might be inferred from
S 2
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260 JNTERNATIONAL ADMINISTRATION
almost any sphere of administration. But the lessons so often
taught are rarely learned. Administration advances slowly and
painfuUy to the position of an impersonal science based upon the
conclusions of gathered and winnowed experience.
Let us note, for example, some of the conclusions suggested
with regard to the working of committees. The proper use of
committees is one of the most important problems of modem
administration, whether national or international. In scHue form
or another committees are the necessary instrument both of
democracy in national work and of the equal association of several
countries in international work. In the growing complexity of
modem life, administration steadily becomes more and more
important in comparison with l^islation in the government of
a country. L^islation alone through a parliament is an inadequate
expression of democracy, and in the control of administration
parliamentary questions, though stiU an effective instrument,
become less adequate as the work of the departments becomes
more complex and intricate in character. There is, therefore,
a clearly discernible tendency to connect parliaments with
administration by the association of specialized conunittees with
the departments. The Foreign Relations Committee in America,
the whole series of committees of the French Chamber, are illustra-
tions of a method of government which may be expected to develop
in Great Britain and in other countries as well. In the equal
association of different Governments it is even more obvious that
committees must be constantly employed.
It was not imnatural, therefore, that when the war necessitated
a huge extension of administrative work affecting the interests
and requiring the goodwill of every class and organization in the
belligerent countries, and later requiring also co-operation between
certain of these countries, the whole field of administration was
covered with a network of new committees. In America, in Great
Britain, to a less extent in France and Italy, a large proportion of
the prominent, the influential — and the potentially troublesome —
were enUsted in improvised committees in whidi their abiUties
were to some extent utilized, their anticipated criticism and
opposition to some extent restrained.
The committees were formed for many reasons and on many
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PRINCIPLES OF INTERNATIONAL ADMINISTRATION 261
principles. Their functions were often not clearly defined or
distinguished from each other. Their authority, and their relations
to the executive departments, varied indefinitely. Few of them
were based on a recognition of the true purposes, and necessary
limitations, of a committee system.
This is an unexplored subject, urgently needing study. The
writer ventures to make a few brief, and perhaps provocative,
suggestions iUustrated by the Allied war organization.
1 . Committees can control, but they cannot direct, administra-
tion. The spring of all administrative work is individual re-
sponsibility. Several able men on a conunittee will, under the
complex necessities of administrative work, effect much less with
a collective and undivided responsibility, than any one of them
who feels individually responsible and is free to make a single
coherent plan.
But the plan made by the individual can properly be submitted
to a committee, who can see that it is sufficiently in conformity
with the special intereM:s which they represent, and the special
knowledge they possess.
2. Committees are an invaluable instrument for breaking
administrative measures on to the back of the public. Modem
government often involves action affecting the interests, and
requiring the goodwill, either of large sections of the community
or of the community as a whole. The action cannot be. made
acceptable without detailed explanation of this necessity, for which
mere announcements in the press are insufficient. In such cases
the prior explanation and the assent of committees of representa-
tive men, who if convinced will carry the assent of the several
sections of the community who look to them as leaders, are of the
greatest possible value.
The use of advisory committees in connexion with the National
Insurance Act is one of many illustrations of this excellent and
proper use of committees.
3. Committees can rarely exercise with effect a collective
authority given by del^ation to the committee as a whole.
The association, however, in a committee, of persons, each of
whom possesses an individual authority in a special sphere, is
a most valuable method of securing action in accordance with
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262 INTERNATIONAL ADMINISTRATION
a coherent plan. The association in the Transport Council of
departmentcd Ministers, each of whom continued to exercise his
special responsibilities in his own country, for the purpose of
adjusting their respective actions, is an illusiration of this principle.
The association of officials with executive authority in the Trans-
port Executive and some of the Progranune Committees, and the
meeting of the heads of the executive departments of the Ministry
of Shipping in the Tonnage Committee (p. 79) are further examples.
On the other hand the same principle is illustrated by the
failiure of the Inter- Allied Shipping Committee (p. 140) through
the fact that its members possessed the authority and individual
responsibility of neither Ministers nor officials. We have seai
that the formation of an international board with del^ated
authority was discussed when the Transport Council was estab-
lished, but was rejected for similar reasons (see p. 163).
4. Committees are in most cases more effective and useful if
they are advisory, even though they consist of persons whose
separate individual authority seciures executive effect to the
wishes of the committee as a whole (see p. 187). When they have
direct power to effect action it will most usefully consist of a right
to veto an unacceptable plan rather than a direct responsibility
for initiating action.
Illustrations of this principle are too common to permit or
need recital.
Here, however, we have trenched upon the wider province of
general administration and the maxims suggested immediately
above are as applicable to national as to international organization.
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CHAPTER III
THE FUTURE OF INTERNATIONAL ADMINISTRATION
International Co-operation before the War. The limited character of the
official organization. The League of Nations. Mistaken conceptions of its rdle.
Difficulties of the League. The incompleteness of the Peace. The abstention
of America. The increase of National Separatism. The work of the League.
Its three categories of duties : to settle disputes ; to remove the causes of
diq;>ute8 ; to co-operate in the solution of world problems. The possible
economic work of the League ; the direction of its Policy. The ultimate problem
of the League ; readjustment of administrative frontiers without war. The
economic conditions of success in this task. Two conceptions of the League's
position in world Government ; an instrument in humble tasks ; a vital influence
in all International policy. Geneva as the centre of the League. The methods
of the League : (a) linking the National Administrations ; (6) Publicity. The
Brussels Financial Conference. The League as a Secretariat of the World's
Government. National Administration and the League. The League's World
Organization.
Before the war the greater part of the organized and con-
tinuous international activities of the world were voluntary.
Throughout the latter half of the nineteenth century and the
early part of the twentieth there was a constant and rapid
increase in the number of international conferences of experts in
every form of action or research of general world interest. Some
of these, of coiurse, were meetings improvised for special purposes
or on special occasions ; others were periodical ; many had
permanent offices entrusted with continuous work. Brussds was
prominent as a centre of these international activities, and certain
citizens of that capital played an honourable part in promoting
them and recording their history and results. Of a different rank,
and most powerful among voluntary and private organizations,
were of course the great Labour Internationals.
International administration of an official character, however,
was confined to a number of special tasks and duties on which co-
operation was at once most necessary and most easy to obtain.
For the most part it was either devoted to scientific research not
involving executive action (like the Institute of Agriculture at
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264 INTERNATIONAL ADMINISTRATION
Rome or the feemi-officiaJ Institute of Statistics at The Hague) or
was limited to definitely restricted or to discontinuous spheres of
work (like the Danube Commission or the Postal Union).
The war, as we have seen, entirely changed both the scale and
character of international co-operation. It extended to the most
vital interests of the several countries; it involved the most
drastic executive action. And this action had to be effected
through national departments co-ordinated by international
bodies, not by international bodies acting with a direct executive
authority del^ated to them by the Governments.
With the end of the war, the immediate tasks for which the
AUied organization was created ceased. The new work which the
needs of the transition period from war to peace imperatively
demanded was either neglected or inadequately handl^ because
the centrifugal forces released by the removal of a common danger
broke the Allied machine.
The League of Nations
The peace of June 1919, however, created in the League of
Nations a new organization designed, and perhaps destined, to
be henceforth the centre of inspiration of all international co-
operation.
It is by considering the probable work and development of
this new instnunent that we shall best see the future of inter-
national administration and the extent to which the experience
of the war is likely to prove of permanent utiKty.
The League as an organization has already suffered from
extravagant hopes and excessive despair. Both largely proceed
from an entirely false conception of the inevitable limits and
conditions of the power of this or any other organization. Many
people seemed to think that the mere institution of the League
would enable the wishes of its most enthusiastic supporters to
override the policies of constituted Governments, and the effective
will of the majority of the world as reflected and expressed, with
whatever distorting influences, in the personnel and policies of
those Governments. No such super-government or parallel
government is possible. The League is an instrument through
which the real desire of the world for international co-operation
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FUTURE OF INTERNATIONAL ADMINISTRATION 266
can find expression and be put into effect. It is a medium through
which the aspirations of those who created it can exert an influence
on world opinion, can educate that opinion and, by bringing it
to bear on the political mechanism of the different countries, can
permeate and leaven the whole of public life. But it is not, and
cannot be, a short cut to supreme control. . It cannot enable
the best part of the world to impose its will upon a hostile, an
indifferent, or an apathetic majority. It is an instrument and not
an original source of power. It is a medium, but a medium only,
through which the desire of the world can find expression.
Moreover, the League under the Covenant is based upon
existing national authorities. The members both of the Council
and of the Assembly are nominated by Governments. It therefore
expresses the will of the world indirectly, not directly by a parallel
form of popular representation. Those who care most for the
ideals on which the League was founded can indeed use the League
itself in many ways to mobilize and concentrate their forces.
But the route to action lies first through the national electorates
and the various national media through which the policy of
national Governments can be affected.
Difficulties of the League
But apart from these inherent limitations in its power, the
League has started under conditions of special, and to some extent
temporary, difficulty of which we must take full account if we are
to judge accurately either its present position or its prospects.
In the first place, the Covenant is drafted as if the League
cajne into operation at a time when peace had been made and as
if its duties were to deal, not with the results of the last war, but
only the possible causes of future wars. The Peace signed in
June 1919, however, was only the first chapter in a peace which
is still being n^otiated in every centre of power in Europe. The
great bulk of the actual questions requiring international decision
during the last eighteen months have been questions directly
resulting from the war, but not settled by the Peace. They have
therefore primarily concerned those who fought the war and
n^otiated the Peace, and have thus been undertaken by meetings
of the AUies in the Supren^e Council rather than assemblies of the
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266 INTERNATIONAL ADMINISTRATION
world, including neutrals, in the League of Nations. The conse*
quent absorption of power and public interest in the Supreme
Council as compared with the League of Nations has inevitably
brought discredit upon the latter and given it the appearance of
ineffectiveness. This is the more so because the line between
AlUed and world questions is hard to draw and the Suprane
Council has therefore dealt with many matters which have a world
interest and might alternatively have been dealt with by the
League.
In the second place, the abstention of Uie great Power whose
President was specially associated with the creation of the League
has deprived it of much of its authority and strength. The long
drawn out uncertainty as to whether America would join or not,
and, if so, on what conditions, has made it difficult to construct
the organization, which will be on a different basis if the League
is to be in effect a League of Europe and not a League of the World.
Equally important is the immense centrifugal force of national
separatism which developed as soon as the war ended. During
the war national sentiment had been stimulated in every country
as a necessary element in the motive force by which the stru^le
was continued. The consciousness of nationaUty, and of divergent
national characteristics, which had been comparatively latent
in the years of peace was awakened and intensified. While the
struggle lasted this developing separatist force was denied its
expression by the imperative necessity of common Allied actiom
As soon as the imminent d6mger was over, however, it appeared
in its full strength. The world started, therefore, with an immense
handicap upon its task of co-operative action in a chaos of inter*
national problems. Any remaining sense of a conunon interest
proved, in one problem after another, inadequate to cope with
the strength of developed national sentiment. This crucial
difficulty of the Peace discussions between the AUies remained
an obstacle to the work of the League when the Peace itself was
signed.
The Work op the League
When, with these permanent limitations and these temporary
difficulties in mind, we turn to the actual objects of the League
as set out in the Covenant, the most striking thing about them
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FUTURE OF INTERNATIONAL AElMINISTRATION 267
is that they are so elastic and expansive in character. The League
may, without contravening the Covenant, be relatively limited
in its operations or it may extend them until it becomes the most
important smgle centre of authority and influence m the world.
The main objects of the League, as they emerge from the
Covenant, may perhaps be described as being of three different
kinds :
(a) the provision of a means of settlement without war of
disputes and quarrels after they have arisen ;
(6) the removal of whatever distiurbs the good understanding
between nations on which peace depends, that is the removal of
the causes of quarrels and disputes before they have arisen ; and
(c) the provision of machinery by which, quite apart from
questions of peace and war, the nations of the world may mitigate
suffering and promote progress by international co-operation.
The primary duty of the League is to intervene when disputes
have aiisen and to submit them to a process of conferences or
arbitration. At the highest this will bring a world opinion and
influence to bear upon them, and at the lowest it provides an
interval in which the countries directly concerned, their peoples
as well as their Governments, will pause and reckon the cost, will
exhaust the possibilities of settlement and take their decision
deliberately. Even this is a service of great importance, since
many wars might have been prevented if the War Offices of the
disputing countries had not rushed their Foreign Offices in the
last stages of negotiations, through their anxiety to obtain the
military advantage of the first blow.
But this role, though important, is limited. If the League does
not intervene until the dispute has already arisen in a form visibly
threatening war, its role may be restricted to that of a wise friend
securing time for delay and giving good advice, but in the last
resort standing aside for the disputants to settle their own quarrel.
It is when we come to the second duty, the ' removal of what-
ever disturbs the good understanding between nations ', that is,
not the settlement of disputes but the removal of their causes,
that we reach the most interesting and the most difficult of the
Le€igue's problems. The crucial task of the League is not to deal
with justiciable questions, i. e. questions which can be settled by
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268 INTERNAHONAL ADMINISTRATION
some form of arbitration procedure, but with the much more
fundamental non-justiciable questions which precede disputes and^
if unsettled, inevitably result in war.
Let us illustrate the distinction by taking the probable
economic duties of the League as being those most closely related
to the administration described in this book. The first, the settle-
ment of economic disputes after they have arisen, is a compara-
tively simple administrative problem requiring the institution of
some form of court, or arbitration system, or judicial procedure
before the Council or Assembly of the League. In the nature of
the case the dispute only comes within the sphere of the League's
action after it has already become a matter visibly endangering
international relations. Whether or not the dispute is settled
will depend mainly upon its intrinsic character and little upon the
actual mechanism of the procediure employed by the League.
The task presents no administrative problem of any special
interest.
When we come next, however, to economic causes of friction
which may ultimately result in disputes, we enter a field almost
as wide as the whole sphere of human activity. We may not
believe, with some advocates of the theory of ' real ' politics, that
economic factors are the sole cause of war, and we need not ignore
the very important part which religion and national sentiments
of honoiur may play. But it is at least certain that economic con-
ditions are among the most important, perhaps are the most
important, ultimate causes of international quarrels. It is there-
fore to be hoped that the League and the power which it is able
to wield will be used tactfully, but with strength and resolution,
to influence the economic policy of the different countries of the
world in such a way as to reduce to a minimum the potential
causes of economic disputes.
If great and developing countries have no access to the sea,
no outlet for their industrial activity, no safety valve for their
increasing and surplus populations by acceptable conditions of
immigration, no reasonably fair and free entry into the colonial
and other markets of the world, the maintenance of seciure peace
will be impossible. A large proportion of the wars in the world's
history have obviously resulted from the abuse of the power of
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FUTUKE OF INTERNATIONAL ADMINISTRATION 269
government in order to secure an undue conunercial and economic
profit by means of the political force and the military force which
it commands. The abuse has sometimes taken the form of the
seizure of new territories, sometimes of the monopolization or
exploitation of territory already acquired, sometimes of the im-
position of deliberately injurious systems of differential duties,
dues, tariffs, and subsidies. Whatever the form, however, the
origin is the same ; the desire to use the instrument of government
for economic or conunercial advantage.
Fortunately we have in the Covenant itself some indications
of the direction in which the poUcy of the League should develop
in this sphere.
There is first a provision in Article 2S requiring members to
secure and maintain freedom of communications and transit and
equitable treatment for the commerce of all members.
There follow the arrangements under Chapter XII of the
Treaty for securing free and equal terms of transit over four of
the main rivers and certain of the great railways of Central Europe.
In the third place there is a provision as regards certain man-
datory colonies that the terms of the mandate should secure to
the other members of the League conunercial privileges equal to
those possessed by the mandatory power.
In the fourth place. Article 8 in the Fourteen Points which
preceded the Peace, and to which all the belligerents in the late
war subscribed, provides for ' the removal as far as possible of all
economic barriers and the estabUshment of an equaUty of trade
conditions among all the nations consenting to the Peace and
associating themselves for its maintenance \
It is significant that the first great international conference
(the International Financial Conference at Brussels in September
1920) included among its most important resolutions one to the
effect that,
within such limits and at such time as may appear possible, each country
should aim at the progressive restoration of that freedom of commerce
which prevailed before the war, including the withdrawal of artificial
restrictions on, and discriminations of price against, external trade.
In these tentative and cautious provisions we have, perhaps, an
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270 INTERNATIONAL ADMINISTRATION
indication of the sphere in which the influence of the League may
finally achieve its most valuable successes.
CJertainly in its dealing with such ' non-justiciable ' questions,
with the causes of disputes not their mere settlement, that the
League will fail or succeed in ensming the future peace of the
world. ' The occasions of war are often trivial ; but their causes
are deep-rooted.'
The Ultimate Problem of the League
What after all is the ultimate problem of international
government ? It is, we may suggest, the administrative division
of the world in relation to the inevitable and constant change in
the relative strength and development of different nations.
In the fifteenth century Spain was a great and virile country
and had an Empire corresponding with her strength. In the
sixteenth century Spain declined and France developed, and under
the old system France acquired by force of arms an Empire corre-
sponding with her new strength. In oiur own century we have
seen a similar growth in the German Empire. The problem of
adjusting the government of the world to such developments will
prove the supreme difficulty of any international machinery which
intends to replace force of arms by peaceful settlement.
Any real hope of successful machinery being devised probably
depends upon whether it is possible to drain some of their content
from the passions behind national feeling ; and here the crucial
point is whether it is possible to isolate questions of commercial
interest and advantage and eliminate national feeling from them.
It is not beyond hope that if this can be done the question
as to which country shall govern some part of the territory of the
world, while still engagiag a perfectly genuine national sentiment,
will not rouse this sentiment to a point at which a solution without
force will be impossible. There is a strong, legitimate, and laudable
local patriotism as between the inhabitants of Manchester and
Salford. But the frontier between them is no economic barrier.
It does not affect the daily conditions of life and work of those on
either side. Though there may be disputes and considerable
feeling, therefore, they do not develop to the point of making the
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FUTURE OF INTERNATIONAL ADMINISTRATION 271
inhabitants of one side want to kill those on the other in order to
dispute the award of an impartial Local Government Board or
Ministry of Health. It is possible to conceive a similar state of
affairs with regard to national divisions of territory, if, but only if,
there is not added to the genuine national feeling the much more
dangerous and poisonous element of competing conmxercial
interests.
If, however, the possession of a certain territory is used by the
Government which happens to administer it for the purpose
of giving an economic advantage to its own citizens by dis-
criminatory tariffs, the time will inevitably come when force of
arms will be the only method of decision. If a particular country,
for instance, entrusts the valuable monopoly of one of its own
colonies to a national trading company, the time will come when
that company will, in comparison with, and under the enervating
influence of its special protection, serve both the exploiting country
and the importing world inadequately and unfairly. The world
will not, and perhaps ought not to, tolerate the situation. This is
only a single example of a principle which permeates the whole
problem and is indeed the decisive factor in it.
It may indeed be ultimately recognized that it is fundamentally
wrong to use the instrument of government to influence the com-
mercial struggle for commercial profits. It is one thing to use
national or international machinery to equalize, or alter, the
conditions (including those of labour) imder which the commercial
struggle takes place; or to exclude from it altogether certain
areas of industry and make them entirely national in character.
It is a very different thing to take a part in the struggle, while it
still continues under the conditions of conmaercial competition,
and to add the strength of Government power to one of the com-
peting parties.
This, however, is to speculate, perhaps idly, upon possibiUties
of the future; and to suggest, not a criticism of any present
national pohcy, but a conceivable development of international
ethics when international relations have been radically changed.
Even from the indications of the Treaty itself, however, it is
obvious that the economic work of the League may profoundly
affect the economic action and pohcy of the several Governments
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272 INTERNATIONAL ADMINISTRATION
if it is not content to deal with disputes but proceeds to deal
with their causes.
The third main category of the League's duties, the provision
of machinery by which, quite apart from questions of war and
peace, the nations of the world may mitigate suffering and pro-
mote progress by international co-operation, is rather su^ested
than prescribed in the Treaty.* Under this category, however,
would come such action as the League has already taken to arrange
the repatriation of prisoners from Siberia and to assist the Grovem-
ments to consider the financial problems of the transition period
from war to peace by arranging the Brussels Financial Conference.
If the League is to take part in influencing economic policy
of this kind, it is evident that its work is infinitely more far-
re6u^hing and difficult than anything arising from its primary
duties under the CJovenant.
Two Conceptions of the League
When, therefore, we are considering the kind of organization
which the League must develop, we must start with a dear con-
ception of what it is intended to achieve, and of the extent to which
it is to affect the current work of the national Governments of
the world.
At the one extreme, as we have seen, the League may touch
poUtical questions only at the point at which they are visibly causing
or about to cause serious international disputes. In that case the
bulk of its current work may be mainly that of handling or co-
ordinating a mass of non-contentious business such as postal con-
ventions and the supervision of water ways. On this conception
the government of the world will, in international as wdl as
domestic affairs, remain essentially national and separatist. Each
Government's poUcy will be developed through a complete depart-
mental organization, formed and decided upon by the national
Cabinets, and communicated, when communication is necessary,
to other Governments through one medium, the Foreign Office.
At the other extreme, however, the League may be conceived
as ultimately becoming an integral factor in the determination of
the policy of every national Government in the world so far as its
pohcy affects other countries. Both the government and the
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FUTURE OF INTERNATIONAL ADMINISTRATION 273
administration of the world in international affairs may then
become gradually, but really and effectively, international. On
this conception the policy of the several nations would not be
merely adjusted by n^otiation, but to a large extent would
be both formed and developed by international consultation.
On the least ambitious forecast the League will doubtless go
beyond the first conception, and on the most ambitious it will
certainly for many years fall far short of the second, but the
organization must from the first be based largely on one or other
conception of this main character and ultimate tendency.
Now practically all the work involved in the more ambitious
conception is work which cannot in its nature be carried out by the
League itself under any delegated authority. The League's work
in such a sphere must necessarily consist, not in forming and
executing policy, but in influencing its formation and its execution
in the national administrations. It is this that constitutes the
League's essential problem.
And at this moment, faced with the task of influencing the
Governments of the world, the organization of the League is neces-
sarily losing something of its direct contact with the two greatest
European centres of power — ^London and Paris — ^by the trans-
ference of its secretariat and the principal centre of its meetings to
Geneva. It escapes some of the dangers of the political environ-
ment at the risk of being divorced from the realities of political
power. It is regrettable that during the year and a half of waiting
' between the signature of Peace and the transference to Geneva it
has been impossible for the League to acquire such a dominant
position as to make any centre to which it transferred its head-
quarters a metropolis of the world. To regret that, however, is to
regret what is not and never has been possible. The position must
be taken as it is and the first necessity is to do everything to meet
the danger that the League, thus separated from the actual
centres of power, will cease to have a continuous influence on the
current political development of the world ; that it will be reduced
to its less ambitious task of dealing with disputes when they have
arisen and of handling a mass of useful and non-contentious work.
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274 INTERNATIONAL ADMINISTRATION
Administbatiye Methods
(a) DntECT Contact
So far as administrative arrangements are concerned, the first
thing is to apply the main principle illustrated by the Allied war
organization, viz. that of penetrating the national administrations
and linking them to the international organization by ensuring
direct contact between those who exercise responsible authority
in the several coimtries.
It is true indeed that the work to be done is in one respect
essentially different from the work of the war. During the war
the problem was to co-ordinate continuous executive work in the
different countries so that it fitted into a coherent plan. What
the League will normally want to do is, not to secure executive
action, but to influence the formation of general policy in a
direction which on the whole will tend towards the peace and
general welfare of the world. Its work indeed will, to a large
extent, consist not in securing official action for international
purposes, but in restraining its use for national purposes when
these involve injury to other countries. Much of the Government
control instituted during the war for the common good of the
Allies has since been used as an instrument in the competition
between them. In a large part of its work, therefore, the tendency
of the League may be to change the object rather than to increase
the extent of Government action. Much of its work may, in one
sense, be negative. The duty of removing causes of dissension takes
priority over that of promoting co-operation in positive action.
This difference means that the association between Ministers and
officials in different countries within a given sphere may be both
less elaborate and less constant, but the essential pr^ciple remains
that effective influence can only be secured by direct contact.
Incidentally, this principle of organization has the advantage
of not only securing the m^tximum of influence but of attaining
its ends with the minimum of expense. It cannot, of course, be
f €drly expected that an organization concerned with the interna-
tional reactions of the policy and action of a whole world will cost
no more than a single department in a national administration.
But a system which converts the existing national administrations
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FUTURE OF INTERNATIONAL ADMINISTRATION 275
themselves into the instrument of international work is essentially
economical. Highly skilled secretariat and organizing capacity
is needed^ and some expert knowledge. But the staff, and its
total cost will, in relation to the scope of its work, be comparatively
small. Occasional travelling expenses are less costly than per-
manent salaries.
(6) Publicity
But if the first principle is one which has been thoroughly
explored in the war, the second is one which was necessarily
unknown till the war was concluded. The League must secure
real publicity for international discussions of international affairs.
The first method, of bringing Ministers and officials in contact with
each other, secures that within each country executive decisions
are taken, and policy is formed, with a due knowledge of the
points of view of other countries and some consideration of the
effect upon those countries. Persons of authority in different
Governments are brought within the sphere of each other's in-
fluence. The second method, however, goes far beyond this and
brings Ministers and officials of all countries alike within the
sphere of the potent influence of the genelral public opinion of the
world.
The Brussels Financial Conference
Both principles are well illustrated in the first piece of work
of the kind we are now contemplating which the League has
taken in hand — ^the summoning of the great International Finance
Conference of Brussels in September 1920, to consider the financial
problems of the world resulting from the war. Here the League
took the initiative in inviting financial representatives from
practically the whole world to meet and discuss the financial
problems common to all of them and the policy of each coimtiy
in relation to its effects upon other coimtries. Thirty-nine
States, representing 75 per cent, of the population of the world,
were in attendance. The delegates were named by the different
Governments but were not the spokesmen of official poUcies.
They came as experts with both private and official experience, and
the conditions of their appointment enabled them to give the con-
ference the full benefit of their knowledge and to express their
T 2
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276 INTERNATIONAL ADMINISTRATION
personal opinions with freedom. Their main discussions, and
indeed all their discussions except in committee, and their full
conclusions, were published to the whole world. While they were
still proceeding the world knew what they were saying and they
were themselves sensitive and responsive to the reaction of world
opinion as it was expressed from day to day in the Press.
Here the organization of the League of Nations fulfilled its
essential function, which is not that of controlling the world from
a new centre of power, but of affording a new opportunity to the
nations of the world to work out their own poUcy in co-operation.
It took the initiative in inviting the CJonference. It offered the
invaluable assistance of an administrative machinery through
which the necessary information was suppUed and the material
requirements of a large Conference provided. It gave perhaps
a certain orientation to the discussions from the mere associations
of the Covenant in whose name the invitation was sent. It defined
the terms within which the debates took place. But at that
point it stopped. It attempted to exercise no influence over the
poUcy being developed through the discussions ; and whether or
not the conclusions recommended were acceptable to the appoint-
ing Governments, or to the Governments on the Council of the
League, it pubUshed them and published them in full for submission
to the general verdict of the world.
The results even of this first attempt were striking. The
Conference recommended unanimously the formation of certain
continuous oi^ans of international action to reUeve some of the
financial troubles of the world. More important, however, perhaps
than such specific recommendations were the declarations on
general poUcy. These have sometimes been depreciated as being
as the officicd Report phrases it, ^ axiomatic in character rather
than original contributions to the financial problem of the world.'
It is a striking thing, however, as the Report continues, that the
adoption of these recommendations, which were made collectively
and unanimously by eighty-six delegates from thirty-nine States
covering three quarters of the population of the world, would
mean a fundamental change in the policies of the great majority
of Eiu*opean nations. The Conference recommended, after full
consideration of the difficulties which their proposal would imply.
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FUTURE OF INTERNATIONAI. ADMINISTRATION 277
that at all costs Governments must meet their ordinary cmrent
expenditure out of their ordinary current revenue as the only
idtemative to further inflation and further increase in the cost of
living. At the moment when they made this recommendation, the
budgets of eleven out of twelve of the European countries repre-
sented did not meet this condition. The Conference recommended,
with equal unanimity, greater freedom of commerce and the
withdrawal of artificial restrictions and discriminations of price
against external trade. At the moment when they made this
recommendation economic recovery was being rendered impossible
in a large part of Central Europe by new economic barriers created
since the' war. It concluded by making an equally unanimous
declaration that the removal of the economic uncertainty at
present besetting alike the countries which are entitled to receive,
and the countries which are under an obUgation to pay reparation
is indispensable not only for the reconstruction of the countries
devastated by the war but also for the recovery of the States on
whom the burden of reparation lies.
In nearly every country there are those who advocate the
policy approved by the Conference, and those who oppose it. The
former will certainly be strengthened, and the opposition of the
latter weakened by the recommendations.
In the current legislative and administrative problems of a
score of countries the recommendations of such Conferences will
thus have a varying, but sometimes a decisive, influence. Their full
effect cannot be measured at once and can never be measured
with precision.
It requires no great effort of the imagination to conceive that
the extension of this method of inviting representative people
within different spheres of action and policy throughout the
world to meet in conference with each other, in the full light of
publicity, may gradually but profoundly affect the formation of
policy in every country. It is a method by which the ofiicial
policies of all countries can be penetrated by the influence of other
coimtries and, beyond that, by the influence of the public opinion
of the world. It is a method by which simultaneously that world
public opinion can itself be not only mobiUzed, when it exists, but
formed and educated.
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278 INTERNATIONAL ADMINISTRATION
National Administbations and the League
If, however, under the difficulties of geographical separation
from any actual centre of power, the League is to remain in eon-
tact with the realities of the life of the world, it must have its
permanent roots in the administrations of the world. For this
purpose the best method is likely to be the nomination of people
who hold, and continue to hold, positions of executive responsibility
in the different Departments of the several countries as persons
specially entrusted with the additional duty of watching the
international aspects of the work of these Departments. In each
great Department whose activity concerns other countries, such
as the Boards of Trade and Treasuries of every important country,
such officials would be looked upon by their own departments as
a means by which the department would be kept informed of the
international point of view. The same officials associated in
Conmiittees with the corresponding officials of other countries
would secure the * direct contact ' which effective international
work reqXiires and would, as we have seen, themselves thus form
the instrument of that work. In such conmiittees they would
represent before their colleagues of other countries the specific
point of view of their own country. They would also give greater
reality and continuity to the more authoritative meetings of the
respective Ministers in such Councils or Conferences of Ministers
as the League invites to meet from time to time.
In each country these representatives of the different depart-
ments, sometimes Ministers and sometimes officials, might meet
(preferably under secretariat arrangements made by an officer
attached to the Prime Minister's department) to survey national
policy as a whole in its international aspects. In such meetings
specifically political affairs would be represented by a member of
the Foreign Office, but the whole official life of the country in its
international aspect would not find its sole medium of expression
through this Department.
The League's World Obganization
With an organisation gradually developed in this way, and with
the development of conferences thrqugh which public discussion
would take place on all matters of international importance, one
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FUTURE OF INTERNATIONAL ADMINISTRATION 279
can imagine that in time the govenmient and the administration
of the world may be profoundly altered. One can conceive indeed
that though the head-quarters of the League may, and perhaps
musty be in a single city not itself a centre of direct executive power,
the League's real organization will be, both in reality and visibly to all
men, not located in one city but in sections in all the main capitals
of the world. The central oi^anisation of the League will not be
a centre of controlling power but an instrument to co-ordinate
activity which is world-wide in its influence and its effects. No
organization which attempts to dominate can conceivably dominate
within anything but the most limited scope and range. But an
organization which is content with the more modest rdle of assisting
the nations to govern themselves in co-operation may permeate
and gradually transform the whole poUcy of the world.
The conception here presented is thus not that of a central
super-government. It may be that this will come. It may be that
the central organ of the League will in time itself become pos*
sessed of executive power, which, within a wide and widening
sphere, will override the powers of national Governments. It may
even be that in future ages the world will find a single centre of
l^islative and executive authority by a process of development
similar to that by which provinces have been united into kingdoms
and kingdoms into Empires. Such direct power, however, if it
comes, must be delegated, not usurped. It must grow by a natural
process from the gradual union of the national authorities, and the
increasing harmony of their poUcies. It must not appear suddenly
as a new, an aUen, and a rival force. In the immediate future
executive power can neither be seized from, nor is it to any very
important extent likely to be delegated by, tl^e national Govern-
ments. Looking at our problem, therefore, within the perhaps
restricted range of an administrative vision, we must contemplate
the League attaining its ends through the more humble methods
of organization here described.
This means, however, neither pessimism nor a narrow ambition
for its work. One may hope by the gradual and careful extension
of this organization and these methods to arrive at a time when
no Minister and no official in any centre of power in the world will
frame his policy or carry out his daily executive work without
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280 INTERNATIONAL ADMINISTRATION
a real consciousness of it« reactions upon other countries and
responsiveness to their claims. One may even imagme, to take an
extreme and perhaps remote example, that the time may come
when no Minister will frame a tariff affecting the trade of other
countries without previous consultation with the countries which
it affects, without being prepared to defend it in Council with his
colleagues of those countries, and on grounds which he can justify
not only before them but before the whole world, to whom their
discussions are known.
So gradually under this system all the forces which exist in the
world to assist the development of policy in a direction which
conduces to peace and the general welfare, as distinct from
national advantage and international dispute, may be mobilized
and brought to bear at the most vital and effective points of
national administrations. And a mechanism so constructed can
never break under the strain of what it undertakes. It is elastic*
It adjusts itself automatically to the possibilities of the moment. It
gives expression in its most effective form to the real international
feeling of the world. But there it stops. It does not attempt to
impose by either superior force or administrative device the
international poHcy of any minority upon the reluctant or re-
sistant national Governments of the world.
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PART VI
DOCUMENTS AND STATISTICS
(For Index, see p. xxii)
The documents printed in Part VI consist partly of official
papers of the Allied Maritime Transport Council (which are
published with permission) and partly of statistics.
They have been selected with the object of illustrating the
nature of the Allied orgcmization developed during 1918.
To these have been added a memorandum (Docmnent No. 18)
on the position of sea-borne traffic at the end of the war.
DOCUMENT No. 1
THE ALLIED AGREEMENT OF 8bd NOVEMBER 1917— AND ITS
APPLICATION
[Document 1 discusses the difficulty in interpreting and apply-
ing the Agreement of the 8rd November 1917, and was written
to advise the British Government as to the policy to pursue in
developing Allied co-operation. The text of the Agreement itself
is given on p. 148. Its importance lies in its practical recognition
of the long-contested principle of ' Pool Tonnage ' for employ-
ment, though not for management. The way in which effect
was gradually given to the principle forms the main theme of
Part IV of this book.]
In considering the best form of co-operation which we should attempt
to secure between the Allies including America and ourselves, we must
start with the following decisions already arrived at.
(1) The* Agreement of the 8rd November 1917. In this France and
Great Britain agreed that they considered that of the different allied wants,
food is the most important and can be treated separately, and that the
burden of providing the tonnage for carrying it should be a conunon
charge on all the Allies including the United States, but that inasmuch as
the need for an immediate arrangement is pressing the Governments
concerned would accept the responsibility of providing the tonnage that
might he required proportionately to their respective means of transport with
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282 ALIJED AGREEMENT OF 3rd NOVEMBER 1917
or without the help of the United States, and they further agreed that they
would proceed forthwith to examine the other hardly less important needs
of the Allies.
^ This Agreement is not altogether easy to interpret with precision.
It apparently contemplates pooling Jtonnage for food but not for other
requirements. The tonnage, however, is to be provided * proportionately
to the respective means of transport '. This cannot mean the mere
application of a mathematical formula. It would for instance be absurd
to say that if Great Britain had 7,000,000 tons engaged in importing work,
France 2,000,000 tons and Italy 1,000,000 tons, the tonnage required
for the agreed programme of all three countries should be provided in the
exact proportions of 7, 2 and 1 by the three countries respectively without
regard to the nature of their needs. Putting aside this impossible inter-
pretation, however, the only alternative one is that tonnage should be
provided after common examination of all the demands upon the tonnage
of the three countries and this in practice almost does away with the
distinction made in the Note between food and other requirements. The
only difference is perhaps the recognition that food should have a general
priority. The distinction, however, between withdrawing a certain
quantity of tonnage from each country for food and therefore leaving
a consequent amount of tonnage for other requirements after examination
of these requirements and on the other hand pooling for all purposes is
clearly rather a slender one.
The following two further principles have been agreed between
ourselves and M. Monnet and circulated to Lord Milner, Lord Robert^
Cecil, Mr. Churchill and Sir Albert Stanley.
(2) That America, France, Italy and Great Britain should all tabulate
and make available to each other a statement showing in detail and as
nearly as possible in the same form each class of requirements for which
tonnage is needed and secondly the tonnage now available and likely to
be available in future through new building, &c. and (8) that all four
countries should agree that the neutral and interned tonnage obtained
through any channel and by whatever country should be used in such a
way as to increase by an equaKextent the tonnage in direct war services,
the extra tonnage being allotted so far as practicable to the most urgent
war need of any of the Allies. The method of allocation must be worked
out later, but it is important that the principle should be recognized that
it is urgency of war needs and not the method by which the tonnage has
been obtained that should be the criterion.
We require to consider in some detail the machinery required to give
effect to these principles.
For this purpose the following suggestions are submitted :
(1) The Wheat Executive has shown the great advantage of Inter-
Allied criticisms of a particular class of requirements by the experts of
each country. It is proposed that this machinery should be extended to
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AND ITS APPLICATION 283
cover all the main classes of imports. Executives on the model of the
Wheat Executive are already being formed for sugar, for meat and for
oil seeds and fats. By similar additions to such executives or by extension
of the powers of the Wheat Executive food can easily be covered. A
Nitrate fbcecutive has also been proposed and it might be either extended
to cover other mimitions or have a Munitions Executive working on the
s€uue lines. Later on perhaps an Inter-Allied Raw Materials Executive
could also be formed. It will be noted that these Executives consist
essentially of experts of the various Supply Departments and are not
shipping in character though they have to be very closely linked to the,
shipping machinery. Naval and Military demands in the narrower sense,
e. g. for vessels directly engaged in combatant services or in troop carry-
ing, &c. would be outside such arrangements, and the coal and ore trade
could similarly be set aside, though it is conceivable it might be brought
within a similar arrangement at a later date.
(2) With such Inter-Allied Executives appointed, it is necessary to
consider their relation to the main problem of the allocation, progranmiing
and direction of sl^ps and to the national import restriction authorities.
Probably the most convenient course is that we should proceed as at
present with an investigation of our own imports on the basis of an esti-
mated available importing capacity which assumed certain specified
liabilities. In our case these assumptions are that we will maintain the
same number of British vessels in the service of our Allies as at present
and also meet the increases in their cereal demands. It is desirable that
France and Italy should take in hand a similar reduction upon comple-
mentary assumptions as to the liability of their tonnage, i. e. that they
will be liable to meet their demands with the tonnage they now have
plus extra assistance from us for cereals. When the Milner Conmiittee
has completed its work, the representatives of the different Supply Depart-
ments would, through the Inter-Allied Executives, try to arrange that
the other countries were submitting to reductions on such a standard as
would imply as far as possible an equal degree of sacrifice. The result
would doubtless be to ccury the French and Italian programmes a long
way towards solution, though a deficit would still be likely to result in
view of the large loss of carrying power of their mercantile marines during
this year. If, however, America is associated with the different Executives
the application of the above principle should be sufficient to bring the
requirements much more nearly within the programme limits. To the
extent to which this is impossible, it will be necessary for the Milner
C!ommittee and similar bodies established in the Allied countries to tackle
the problem afresh on a more drastic standard.
(8) As the programmes of requirements are being modified in the above
manner, it is necessary to have machinery to programme the ships in
conformity with the gradual modification of requirement programmes.
For this purpose, however, it is extremely undesirable that anything like
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284 ALLIED AGREEMENT OF 3bd NOVEMBER 1917
an International Shipping Board should be established. The danger is
thai 8V4ih a Board would consist of people who are at once out of touch with
the actual executive machinery of the different Shipping Departments and
at the same time not invested zoith such authority as Ministers like Lord Milner
or M. Qementel would have to secure actual decisions for cutting down.
What it is suggested is wanted is first of all to secure that there are in
London people who can speak for the different Shipping Departments,
who would confer with ourselves so as to arrive at a statement of the
most iq)propriate general programming of ships in accordance with the
arranged programming of requirements and an agreed statement of the
extent to which a further reduction in requirements is necessary in order
to make the shipping programme possible. For this purpose we already
have suitable people in the executive machines of France and Italy and if
Mr. Shearman is appointed to act in a somewhat similar capacity in this
country to that which Sir Thomas Royden occupies for us in America, the
people required would be available. These people would meet not as a
permanent Committee and would not necessarily be always the same, the
best method of working being ad hoc Conferences called at the most
appropriate moments. From the work of such Conferences representations
would be made to the respective Governments through their representa-
tives for either the re-allocation of blocks of tonnage whether national or
neutral and or as a complement an application for an order to the respective
authorities engaged in cutting down imports to cut them down to a
specified extent.
(4) The allocation and general programming of steamers having been
arranged in this way, the arrangements for actual direction require to be
considered. For this purpose it is essential that C.B. [Commercial Branch]
in this Ministry should have different sections linking on to the different
Executives in the manner already arranged for the Wheat Executive, and
that in accordance with the principle laid down in the Wheat Agreement the
actual decision as to the ports to which a specified ship should go, should
be given by that Branch in the case of all the commodities dealt with by
the different Executives. This is already working for Italy and France
would be willing to accept a similar arrangement. The details of manage-
ment, payment of the vessel and all consequent executive details would
be settled by the respective countries in Rome, Paris, London, &c. In
the case of America it is doubtful whether a similar arrangement would
be possible. We should, however, at least arrange that America should
keep us informed by cable of every decision to allocate a vessel to a specified
American port and we could adjust the rest of the tonnage upon that basis
communicating with America where necessary to secure a change in
her plans.
J. A. S.
17 November 1917.
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NEED FOR AJVIERICAN ASSISTANCE 285
DOCUMENT No. 2
THE NEED FOR AMERICAN ASSISTANCE AND ALLIED
CO.OPERA.TION ^
[Document No. 2 is one of the two or three most important
here reproduced. It was prepared as a British document ; but
was taken as the basis of all the shipping discussions at the Paris
Conference of November-December 1917, and its proposals, in-
cluding those for AUied co-operation, were accepted. The Allied
Maritime Transport Council was the organization through which
that co-operation was effected.]
The losses of British, Allied and Neutral ships and the serious failure
of the French and Italian harvests this year have created a tonnage
situation of great gravity.
The position may be briefly summarised as follows :
Great Britain during the war has lost about 10 million tons d.w. by
war and marine risks. She has lost net (after allowing for both building
and captured ships) about 4 million tons d.w. Taking world tonnage as
a whole the gross losses may be taken at about 17 million tons d.w. and
the net losses at nearly 9 million tons d.w. Of these losses more than half
have occurred during this year, some 9 million tons d.w. being lost already
this year without allowing for vessels seriously damaged.
Excluding vessels unsuitable for ocean-going trade, it may be said
that the total world tonnage now amounts to about 45 million tonnage d.w.
Of this about half is British : of the remainder about f ths is Allied and
f ths Neutral.
In a telegram sent to America in September, it was estiniated that
world building would overtake losses if America could build 6 million tons
gross, or say 9 million tons d.w. per annum. This estimate was based
upon the experience of this year and made some allowance for marine
loss, for obsolescence and for serious damage to vessels not actually sunk ;
it was not however designed to do more than overtake losses, i. e. it would
not compensate for past losses or for future losses before the new programme
matured. Since then losses have somewhat declined, but on the other
hand the British building programme which it was then hoped might
reach 4 million tons d.w. will it is probable, not produce more than
2} million tons d.w. On the whole 6 million tons gross or 9 million tons
d.w. is still suggested as the best standard for America to take. It was
explained in that telegram that the reason why it was impossible for
* Tonnftge thronghont this memorandum is, in accordance with American custom, given
in deadwei^^t, except in the calculations of the tonnage for the American Army where the
tonnage is given in gross in view of the large proportion of vessels of a passenger type for
which deadweight figures are misleading.
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286 NEED FOR AMERICAN ASSISTANCE
Great Britain and the European Allies to build on such a scale as that
suggested for America was that in the early stages of the war the immediate
necessity was to increase armies, navies and munitions and the Allies'
strength has therefore been committed in these directions. A much
smaller effort directed to shipbuilding would have enabled them to out-
build submarine destruction even at the present rate. Fortunately it
was just when merchant shipping became as vital a factor as armies,
navies, and munitions, that America, whose industrial and engineering
resources are the greatest in the world, entered the war.
As compared with the 6 million tons gross or 9 million tons d.w.
America is said to be contemplating a programme of about 6 million tons
d.w. The actual programme forwarded to us, however, only provides for
about 5 million tons d.w.
The situation has been rendered still more difficult from the British
point of view by the fact that nearly 900,000 tons d.w. of shipping which
the British Grovernment had ordered in America ha^ been requisitioned
by the American Grovemment. This tonnage (allowing for delivery dates)
would have had an importing capacity of about 2 million tons in 1918
and would have enabled Great Britain to give additional assistance to
the Allies to that extent. It will be recognized that but for the foresight
of the British Grovemment in ordering these vessels early in this year and
many months before the American Grovemment Shipbuilding organization
had been completed, the output of American yards this year and early
next would presumably have been much less than it now will be.
Great Britain is now providing France and Italy with over 2 million
tons d.w. of British tonnage in addition to over J million tons d.w. lent to
Russia^ the total for all Allies being about 8 million d.w. This tonnage,
if withdrawn into British service, would suffice to keep Great Britain's
imports next year up to her imports for this year, so that the general
position is that her tonnage is sufficient in spite of losses to maintain her
own part in the war. The difficulty arises through the necessity of helping
the Allies in spite of those losses. It is, however, obviously impossible
for Great Britain to withdraw her tonnage from the Allies. On the
contrary, she is, in view of the extreme gravity of the position, endeavour-
ing so to restrict even her essential imports next year as to enable her to
continue her present assistance to her Allies, to replace British vessds
lost in their service and also to provide tonnage sufficient to help in meeting
the increase in their cereal requirements through bad harvests, the latter
meaning the conveyance of over 2 million extra tons and requiring a further
tonnage of about 750,000 tons d.w. If this should prove possible, however,
it will only be at the most serious cost to this country. If no further
assistance be given to the Allies, British imports next year would be
reduced from about 84 million tons to about 28 million tons (excluding
oil fuel for Admiralty in both cases). In considering these figures it must
be remembered that British imports of food (which are capable of little
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AND ALLIED CO-OPERATION 287
reduction) amount to about 15 million tons, that over 11 million tons
consist of ore and munitions, and that a large proportion of the remaining
imports are required for war purposes. As compared with these figures,
her pre-war imports amounted to about 54 million tons. That is her
imports, excluding food and munitions, which amounted to over S6 million
tons in peace times, have this year fallen to about 8 million tons ; and
6 million tons must, as stated above, be taken partly off this figure and
partly off the food and munitions requirements for next year even apart
from the conveyance of the further 2 million tons of cereals for the Allies.
It is necessary to emphasise the fact that if in spite of the above facts
and of the loss of the British ships building in America Great Britain is
able to realise this programme, it represents the most extreme assistance
it is conceivable that she^can give and that it may be impossible to give
assistance to this extent.
Of about 27 million tons d.w. of British ocean-going tonnage at the
beginning of the war, we have sustained a net loss of about 4 million d.w.
A further million tons is in the Yards for small and big repairs. About
5 million d.w. tons are required for direct Army and Navy services apart
from indirect requirements such as munitions and about 8 million tons
d. w. are in the service of the Allies. Excluding vessels which are unsuitable
for general work or are required for essential supplies of the Colonies, this
leaves only some 9| million tons d.w. for importing work. In order to
make this contribution to the war, Great Britain has had to sacrifice her
shipping interests, whole Lines built up for many years being completely
destroyed, e. g. the Prince and Booth Lines between North and South
America. She has had to sacrifice her export trade, exports only being
allowed so far as there is space available in outgoing ships sent to bring
back essential imports. She has already had to impose severe hardships
on civilian interests, the use of petrol being for instance stopped for pleasure
traffic, oats not being allowed except for horses engaged in essential work,
and the supply of cotton for the main British industry in Lancashire being
reduced to 60 per cent. The further programme contemplated for next
year will go far beyond this and will involve some industrial disaster and
the absolute cutting off of many articles of foodstuffs ordinarily regarded
as essentiaL
In spite of those measures, there must, however, still be a serious
deficit in the tonnage required for absolutely essential French and Italian
requirements through the fact that France and Italy as well as ourselves
have had serious losses during this year. France's own statement of
her deficit of tonnage is about 1} million tons gross or 2,400,000 tons d.w.
or 6 million tons of imports, which would still leave a deficit of over
4 million tons after allowing for the extra assistance for cereals contem«
plated as above by Great Britain. It may, however, be perhaps fairly
assumed that France could carry on if she had sufficient tonnage (in
addition to that given by Great Britain for her increase in cereal demands)
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288 NEED FOR AMERICAN ASSISTANCE
to keep her imports for 1918 up to those for 1917, i. e. to compensate for
the reduction in the carrying power of vessels under her own control
through losses. This means additional tonnage sufficient to carry some
2 J million tons of imports in the year or say 750,000 tons d.w. continuously
employed. Italy on a similar basis would require tonnage for some
1^ million tons of imports or say 500,000 tons d.w. This extra tonnage,
amounting to some 1^ million tons d.w. can only be provided from
American tonnage or from extra neutral tonnage (in addition to what is
not in war service and the vessels to replace future losses). This figure
(which is less than half the aid Great Britain proposes to give in spite of
the loss of the vessels building in America and would mean a contribution
by America of only some \ million tons in addition to those vessels) must
be taken as a low figure which would still involve very considerable
hardship and risk for France and Italy as well as for Great Britain.
It is suggested that America should aim at providing for an average
continuous emplo3rment for France and Italy or for Great Britain (which
would thereupon give equivalent tonnage to France or Italy) not less
than \\ million tons d.w. excluding oilers and meeting her own military
requirements with the balance. It is hoped that \ million tons of this
can be given at once, and the rest provided as the American shipbuilding
programme develops.
The tanker position is somewhat different. Great Britain has throughout
made it clear that, while she could transport her own supplies although
not all the Allies' supplies without assistance, she had insufficient tank
vessels for the supply of oil fuel to the Navy. In consequence of this
deficiency, it has been necessary to use the double bottoms of ordinary
cargo vessels (to the extent of about 100,000 tons a month) to carry oil
fuel, which is uneconomical and means delay and the loss of an equivalent
weight of ordinary cargo. America, however, is relatively rich in tank
vessels and in arranging to give additional ordinary tonnage to her Allies
in spite of her own serious position Great Britain hopes that America will
find it possible to provide, by requisitioning from commercial employment,
sufficient extra tankers to make up the deficit and to render unnecessary
the continued use of double bottoms. Full particulars of the oil fuel and
tanker position have been given to the American Government.
What is urgently needed is the immediate provision of 100,000 tons d. w.
of tanker tonnage with a further addition of 200,000 tons d.w. as soon as
possible.
In considering the possibility of America accepting this position, it is
necessary to take into account the American military requirements <mi
the one hand and on the other the tonnage at her disposal now and during
next year.
Official information just received from the American Government
states the American position at present to be as follows.
There is a total of 589 vessels under American Registry over 2,500 tons
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AND ALLIED CO-OPERATION 289
d.w. aggregating 3,620,820 d.w. of which tankers represent 1,052,258. As
against this the Navy has (excluding tankers) 80 vessels aggregating
151,509 d.w. tons. The Army has 108 of 848,894 d.w. tons, 48 vessels of
808,719 d.w. tons have been allotted to Allied Governments and 81 vessels
of 501,705 d.w. tons are in private trade in the war zone. American
requirements for necessary supplies are estimated at 2| million tons d.w.
excluding tankers, representing a considerable increase from the former
figures which shewed a requirement for 1} million tons d.w. for imports from
the Far East and from South America.
It is stated that there are no vessels now capable of being withdrawn
from .present trades, and the American tonnage shortage on the above
figures is given as 1| million tons d.w. without coimting about 1 million
further tons which are being asked for by the Allies.
The above figures of course do not include the small vessels under
2,500 tonjs d.w. which are presumably available to help in coastwise
work, nor sailing vessels available for the same purpose. Nor do they
include neutral vessels employed in American waters of which there are
believed to be some f million tons d.w. mainly Norwegian. In addition
the Extern imports can presumably be largely carried in Japanese tonnage
of which it is understood something like 500,000 tons d.w. might be
available. In addition there is the possibility of bringing into employ-
ment refugee neutral tonnage that is now idle in American Ports which is
understood to amount to some | to f million tons d.w. There are also
possibilities of interned vessels in South America being brought into use.
Beyond this there is, of course, the American new building. By the
Ist April this should, according to the present programme, give an extra
million tons d.w. Later the situation should improve rapidly, as new
building from April to June should give a further 1| million tons and from
July to September a further 1| million tons d.w. and from October to
December a further 1| million tons d.w.
Some reference may also be made to British experience in connection
with the statement that no ships are capable of being withdrawn from
their present trades. This of course must be for America to decide and
Great Britain has no desire, nor the necessary information, to criticise the
estimate upon which this conclusion has be^ formed. It may be useful
to remark, however, that one of the most remarkable things Great Britain
has learnt in the war is the extent to which it is possible, without absolute
disaster, to cut off requirements that on first careful investigation appeared
to be absolutely essential. Great Britain is more dependent upon importer
than any other of the main belligerents. She has to import f ths of her
wheat and in peace times imports nearly 20 million tons of foodstuffs
a year. Under the strain of the war, however, her imports have» as stated
above, been reduced from some 86 million tons excluding foodstuffs to
some 8 million tons excluding foodstuffs and munitions and this figure
must again be reduced for next year. It was never anticipated earlier in
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290 NEED FOR AMERICAN ASSISTANCE
the war that a reduction so drastic would be possible. It is experience
alone which has shown that a country which (like America) has a large
civilian consumption and (unlike America) is hampered by an inadequate
home producing^ capacity could bear so big a strain. A careful examination
by the British Government of the 50 million tons of imports coming in
earlier in the war showed that only a little over 2 million tons were r^farded
as non-essential. In fact, however, the determination to continue her
increased naval and military operations and to continue her assistance to
the Allies has resulted in the immense further reductions shown above
and though there has been hardship and inconvenience there has so far
been no actual disaster. There are, of course, a very great number of
imported articles which are both required for military purposes and are
also used for civilian consimiption. The only practical way which Great
Britain has found of economising tonnage in these circumstances is to
start by actually withdrawing ships so ruthlessly that those left are quite
inadequate for normal civilian consumption. In the more important cases
such as steel, it has been found necessary to prevent any civilian oonsump*
tion except through a specific licence given only on the ground that the
proposed use was essential in the national interests. It is suggested that
in a similar way America might find some of the wool which she requires
for military purposes by obtaining it from the wool consumed by her large
civilian population. Nothing has been more strikingly shown in the war
than that civilian requirements can adjust themselves to reduced supplies
when the necessity actually arises through the withdrawal of vessels for
military service to a very much greater extent than the best experts
considered possible beforehand. It may be hoped therefore that America
will find that some further vessels that she now thinks possible may be
rendered available from private emplo3anent for war service and the total
tonnage shown as above as available for the latter purpose may be increased
accordingly.
Against this tonnage there are the American requirements stated above,
plus the additional Allied requirements also stated, a necessary provision
to meet losses and above all the increased needs of the Army.
The needs of the Army are extremely difficult to calculate as the
exact composition of American divisions, and the way in which they will
be transported are unknown, and the provision for reinforcements and
for hospital ships, which must of course depend upon casualties, &c., is
in any case very speculative.
It may be said generally that it takes 4 gross tons of shipfmig to
transport a man, 8 gross tons to transport a horse or mule, and to suj^y
one man from America would require 1 gross ton perpetually emi^oyed.
These figures, however, make no allowance for hospital ships, reinforce-
ments, Ac.
A memorandum is attached showing the vessels required for different
military programmes. It has been ascertained to-day that much moie
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AND ALLIED COOPERATION 291
exact infonnation is now available as to the American arrangements.
A more precise statement is now being prepared and will be substituted
for this estimate which must be regarded as very hypothetical. It will be
seen on the assumption that :
(1) wastage of personnel will occur at roughly 8^ per cent, per month
or 100 per cent, per annum ;
(2) wastage of forces will occur at roughly 2| per cent, per month or
80 per cent, per annum ; and
(8) woimded or sick would be retained in France and only the perma-
nently disabled men repatriated to America, the following tonnage would
be required on different military programmes (the estimate is designed to
show the tonnage required to transport, maintain and supply a ^ven
force, commencing December 1st, 1917. It does not take into account
the niunbers already transported) :
(a) If 400,000 men (including non-combatants, L. of C. troops, &c.)
and 70,000 horses are to be in France by the 80th April 1918, the tonnage
required would rise from about 1 million tons gross to 1,527,500 tons gross
on the 80th April. If no addition were then made to the force 544,500
tons gross would be sufficient to maintain the force and provide re-
inforcements.
(6) In order to have 800,000 men in France by the 80th September
(including non-combatants, L. of C. troops, &c.) and 140,000 horses the
tonnage instead of being reduced after the 80th April would rise gradually
until by the 80th September it reached 2,072,000 gross tons. If the force
were not thereafter increased, 1,089,000 gross tons would suffice to maintain
the force and transport reinforcements.
(c) If the force were thereafter increased to 1 million by the 81st
December 1918 (including non*combatants, L. of C. troops, ftc.) and
175,000 horses, the tonnage instead of declining after the 80th September
would increase till it reached 2,841,000 gross tons on the 81st December,
the tonnage thereafter required for maintenance and reinforcements, if no
further addition to the total force were made, being 1,858,000 gross tons.
It is apparent from the above figures that with the tonnage immediately
under American control and with her requirements as at present stated,
America can scarcely do more than provide about | million tons d.w. for
the Allies in the immediate future without definitely limiting her military
expedition. If, however, she can bring into use the neutral tonnage now
lying idle or out of war work, can meet her Extern requirements with
Japanese tonnage and can reduce her import requirements, e. g. by restrict-
ing civilian consumption, there is a reasonable hope that she could provide
France and Italy with the minimum tonnage they require as described
above and also make her military programme on the basis of having
1 mill]<m men in France by the end of next year with the aid of her new
building. Any such estimate, however, must necessarily be very hypo^
thetical and to secure any margin it would be necessary that America
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292 NEED FOR AMERICAN ASSISTANCE
should expedite building to the utmost possible extent and if possible
raise the rate of output to the 9 million tons d.w. per annum previously
suggested.
Form of Co-operation between the Allies.
The objects to be secured are of course
(a) to make the most economical use of tonnage under the control of
all tiie Allies ;
(b) to allot that tonnage as between the different needs of the Allies
in such a way as to add most to the general war effort ; and
(c) to adjust the programmes of requirements of the different Allies in
such a way as to bring them within the scope of the possible carrying
power of the tonnage available.
To secure these objects an International Board with complete executive
power over common pool of tonnage had been proposed, but has been
rejected for the following reasons :
It would be difficult for any country and particularly for America or
Great Britain to delegate absolute power to dispose of its tonnage (which
is the basis of all its civilian and military requirements) to a representative
on an International Board on which he might be outvoted. Such a Board
moreover would not lead to administrative efficiency partly because the
complete control of all tonnage can scarcely be well concentrated in one
place and partly because representatives upon it would tend to be at
once out of touch with the actual administrative executive machinery
and at the same time scarcely invested with sufficient authority to make
reductions in the various supply programmes, munitions, food, Ac
It must be remembered that the problem of the allocation of tonnage
is largely a problem of securing that the different requirements which
make demands upon tonnage should be adjusted in the fairest and best
way, and that these requirements can only be so restricted by the experts
in each class of commodities. It is for instance impossible for any except
the munitions experts of the different Allied countries to deal with the
restriction of the Allied munitions programmes within specified limits.
In view of the above considerations the following principles were
agreed on November 20th :
(a) That America, France, Italy and Great Britain should all tabulate
and make available to each other a statement showing in detail and as
nearly as possible in the same form each class of requirements for which
tonnage is needed and secondly the tonnage now available and likely to
be available in future through new building, Ac These requirements
having been classified (showing the source of supply, &c.) and having been
adjusted (i) to secure a reasonably uniform standard of adequacy both
as between classes of commodities and as between countries, and (ii) to
bring the total within the carrying capacity of the Allies as a wh(de^ would
form the basis on which the general allocation of tonnage would be deter-
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AND ALLIED CO-OPERATION 293
mined. The calculation would be revised at convenient intervals in the
light of losses, new building, war requirements, and other factors in the
problem ; but it would be an essential feature of the scheme that subject
to such periodical reallocation each Nation should manage and supervise
the tonnage imder its control.
(6) That all four countries should agree that the neutral and interned
tonnage obtained through any channel and by whatever country should
be used in such a way as to increase by an equal extent the tonnage in
direct war services, the extra tonnage being allotted so far as practicable
to the most urgent war need of any of the Allies. The method of allocation
must be worked out later, but it is important that the principle should be
recognised that it is urgency of war needs and not the method by which
the tonnage has been obtained that should be the criterion.
(c) Steps to be taken to bring into war service all possible further
tonnage, such as in South America, ftc., ftc.
(d) Control over cargoes carried to be such as to ensure that they
satisfy the most urgent war needs in respect of which the tonnage has
been allotted.
It is the intention in carrying out (a) and (6) above that Allied bodies
for the different main requirements for food, for munitions and for raw
materials should be formed on the model of the Wheat Executive, and it
is hoped that America will be associated with these bodies.
It is at the same time absolutely essential that for the proper inter-
change of views and information about the tonnage situation there should
be an American representative in this country as there are already French
and Italian representatives, who would act in the same capacity here as
Sir Thomas Royden does for us in America.
Summary.
The conclusions which appear to follow from the above statement
and from the recent discussions between American, French, Italian and
British representatives are :
(1) That America should aim at building at the rate of 6 million tons
gross (i. e. 9 million tons d.w.) not 6 million tons d.w. per annum.
(2) That it is of extreme importance that she should supplement the
assistance given to France and Italy by Great Britain by providing
at least } million tons d.w. in the inmiediate future and by raising
this figure to an average of at least 1| million tons (including more
than I million tons of British ships building in America).
(8) That this is only possible without limiting her military effort, if she
(a) takes every possible step to bring into war service neutral and
interned vessels now idle or out of war service, (6) obtains the
maximum assistance from Japan, (c) reduces her own requirements
of imports (e. g. by restricting civilian consumption) and requisi-
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294 NEED FOR AMERICAN ASSISTANCE
tions drastically from her own trade along the lines already
adopted by Great Britain.
That if she takes these steps, however, there is a prospect of her
being able to transport and maintain an American Army of 500,000
by the early siunmer and of 1 million later in the year.
(4) That Great Britain in promising further assistance to the Allies to
meet their increased cereal demands, in spite of the loss to herself
of 'the British vessels building in America, has done so in the hope
that America will help with additional tank tonnage to the extent
of rendering unnecessary the further uneconomical use of doubk
bottoms in British cargo vessels for oil fuel for the Navy (100,000
tons a month). It is hoped that America will take steps to provide
sufficient tank tonnage for this purpose and to meet the deficit in
stocks by requisitioning tankers &om their present conunerdal
employment, 100,000 tons d.w. being immediately required and
a further 200,000 as soon as possible.
(5) That America should, like ourselves, accept the principle that
neutral and interned tonnage obtained through any channel and
by whatever country should be used in such a way as to increase
to an equal extent the tonnage in direct war services, the extra
tonnage being allotted so far as practicable to the most urgent
war need of any of the Allies.
(6) That in order to secure the necessary coH>rdination and ecomxny
in the use of tonnage, America should appoint a permanent repre-
sentative who can confer with the British, French and Italian
Shipping officials in London as Sir Thomas Royden confers with
the American Shipping Board.
An International Shipping Board is not considered either
desirable or practicable. It is recognized that neither the Amencan
nor the British Government would be wUling to delegate to such
a Board the final allocation of their respective ships, and that the
management of American and British ships cannot be centralised
in one place. At the same time it is of vital importance that there
should be the fullest possible interchange of information and views
such as can only be obtained through the presence of an American
representative in this country and a British representative in
America.
(7) That the machinery for effecting the necessary economies in all the
various commodities requiring transport is provided througb
Allied Committees for each main class of commodity consisting
of exports in that commodity. That Committees should therefore
be formed in London for other foodstuffs, for munitions and for
raw materials on the model of the Wheat Executive t and that
in view of the close relation of the work of such Committees with
the general tonnage position and with American pcdicy in the
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ALLIED MARITIME TRANSPORT COUNCIL 295
provision both of ships and commodities, appropriate American
representatives should be associated with these Committees.
November 22, 2928.
DOCUMENT No. 3
CREATION OF ALLIED MARITIME TRANSPORT COUNCIL
(Extract from Official Report of Paris Conference^
Nov. 29air-Dec. 3rd, 1917.)
The Special Committee for Maritime Transport and General Imports
of the Inter- Allied Conference of Paris has decided by unanimous resolution
of the delegates of the United States of America, Great Britain, Italy and
France, that it is necessary to arrange a form of co-operation between the
Allies.
[The OfiScial Report then recites and endorses the objects of
Allied co-operation, and the principles agreed with America as
given in Document No. 2, and continues.]
Allied bodies for the different main requirements for food, for muni-
tions, and for raw materials will be formed on the model of the Wheat
Executive, America being associated with these bodies.
It being necessary in order to obtain decisions by the respective
Governments that each country shaU designate one or two ministers —
the United States one or two special delegates — ^who will be responsible
towards their respective Grovernments for the execution of the agreements
arrived at and who will meet in conference as Allied representatives as
may be necessary from time to time, whether in Paris or in London,
according to the circumstances of the case, either on their own motion or
at the request of the Executive Departments, it was resolved that ^ for
^ the purpose of carrying out the common policy above indicated the
* appropriate Ministers in France, Italy and Great Britain, together with
^ representatives of America^ shall take steps to secure the necessary
^ exchange of information, and co-ordination of policy and effort, estab-
* lishing a permanent office and staff for the purpose.'
[This sentence constituted the authority for the constitution
of the A.M.T.C.]
DOCUMENT No. 4
PRINCIPLE OF ALLOCATION OF NEUTRAL VESSELS BROUGHT
INTO THE POOL UNDER THE DIRECTION OF THE ALLIED
MARITIME TRANSPORT COUNCIL
[This document should be read in conjimction with the descrip-
tion given on p. ^7 of the problem presented to the Executive
by the task of allotting neutral ships.
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296 ALLOCATION OF NEUTRAL VESSELS
The principles advocated were in fact adopted and put into
operation.]
The main facts to bear in mind are the following : —
(1) If national programmes were fully agreed and there were no
national divergencies of interest, all the shipping under Allied control
would doubtless be directed by a single Executive Authority which, in
giving its orders, would have regard solely to the allocation of each vessd
to the work on which, having regard to its type and position, it could be
most economically employed.
(2) As programmes have not been fully agreed and brought into
conformity with the carrying power of the available tonnage and obviously
eannot be, at any rate in the near future, there remains an actual or
possible divergence of national interest and views in certain cases. It is
the object of the AM.T.C. and its organisation for the examination of
import requirements, &c., to arrange these differences by agreement.
It is recognised, however, that divergencies may be too great or too
serious for this to be possible in all cases.
This is the fact upon which the principle of the A.M.T.C., that in the
last resort each country retains executive authority over its own tonnage,
is based.
(8) By common consent, however, this principle is not applied to the
small pool of neutral tonnage coming avaQable for direct orders of the
A.M.T.C. under the recent arrangements. This pool of tonnage is to
receive actual and final executive orders from a single executive authority.
That is to say, the intention is apparently that this tonnage should in
fact be dealt with as Allied tonnage generally would be if there were no
national divergence of interest and all executive power were concentrated
in one authority.
If this is to be the case, however, it is clear that the tonnage in question
must be used in such a way as not to involve such a question of divergence
of national interest as is safeguarded by the proviso of the constitution
referred to in paragraph 2.
As an illustration of this, it is obvious that an Ally which is supfrfe-
menting the deficits of other Allies in specified services, e,g.^ cereals, could
not consent to the allocation of a ' pool ' vessel which would be suitable
for such a service to a service not agreed as essential.
(4) A consideration of the detailed working of the A.M.T.C. presses
this principle further. The general import requirements of the Allies are
being examined by the Imports Conunittee in connection with the Exe-
cutives, and must finally be reviewed by the Council. So far as the per*
manent organisation is concerned, it is the Imports Committee rather than
the Tonnage Committee which considers whether the need of one Ally
for one import is greater or less than the needs of another Ally for another
import. The * pool ' allocations, however, or plan of allocations, must
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BROUGHT INTO THE POOL 297
clearly be dealt with under the Tonnage Committee, but that Committee,
while eminently qualified to agree as to the most suitable employment
of a vessel is not the appropriate body to consider the relative needs of
different imports of different Allies. Moreover, to consider such com-
peting needs (which involve such wide issues and must clearly be examined
as a whole) in connection with the allocation of specific vessels would
obviously be a procedure likely to involve considerable disagreement and
difficulty, and in the end would be futile in view of the much greater bulk
of adjusting national tonnage on which the fulfilment of programmes
ultimately depend.
(5) It would seem to follow that ' pool ' vessels should be used solely
for non-controversial services, ie., put into services which by common con-
sent require more tonnage than the * pool ' vessels will themselves supply.
It would obviously be convenient, in the application of this principle,
to choose the services beforehand which satisfy this principle, and the
most obvious services are French coal, Italian coal, with return cargoes
of ore on the ordinary principles, and Allied cereals. These serviqes
between them clearly afford sufficient scope for the economical use of
every vessel that will come within the pool and each of these services will
necessarily require supplementing by other vessels beyond those which
can be obtained by the pool. This supplement will be provided partly
by French and Italian national tonnage and partly also as a final adjusting
element by the addition of other Allied tonnage. If the pool is to be run
in accordance with the principle dictated above, it would appear clear
that the adjustments should be made not upon the neutral pool of tonnage,
but upon National and Allied tonnage.
(6) If these principles are adopted it will enable the neutral vessels
coming into pool to be allocated as between the services mentioned above
solely upon the criterion as to which of the services the particular vessel
is most suitable for, having regard to her type and position, and without
regard to the competing requirements of the several countries and the
possible difference of views as to the full extent of the import programme
of each commodity in question which must be fulfilled.
(7) With these principles adopted, the management of this small pool
of neutral tonnage can proceed straight forward upon ordinary business
lines and without involving discussions on particular cases as to the
general interests of the different countries which obviously must be
discussed and settled in a wider context.
(8) If, however, it proves necessary or desirable to use the small fleet
under direct A.M.T.C. control in order to give special assistance to any
immediate and urgent work for which the Council may desire to take
responsibility, the necessary orders should be given to the Tonnage Com-
mittee in the form of a direction to favour particular services with this ton-
nage to a specified extent so as to avoid any discussion by the Committee
of the general imports situation in relation to particular allocations.
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298 ALIJED MARITIME TRANSPORT COUNCIL
DOCUMENT No. 5
ORGANISATION OF THE ALLIED MARITIME TRANSPORT
COUNCIL, EXECUTIVE, AND ASSOCIATED ALLIED BODIES
The Council itself consists of the following members : —
The Council.
Lord Robert Cecil, K.C.
Sir Joseph Maclay, Bart
M. Clementel
M. Loucheur
Signor Villa .
Signor Crespi
Hon. R. B. Stevens
Hon. G. Rublee
Great Britain.
France.
}
}
y Italy.
\ United States.
Signor Villa joined the Comicil (Signor Salvatore Orlando retiring) in May
and the Hon. George Rublee joined in July.
The Council itself only met at long intervals. The current work,
including both the ordinary administrative work, and also the task of
co-ordinating the policy of the several (Sovernments by detailed com-
munication with the respective Ministers, has been carried on by the
Allied Maritime Transport Executive.
Permanent Organisation.
The permanent organisation consists of four National Divisions who
will be housed together in Lancaster House with the exception of the
British Division, the greater part of which must remain in the Ministry
of Shipping.
The work of these four National Divisions is co-ordinated by one
Main Committee which generally supervises the work of the whole Allied
organisation, and three Sub-Committees dealing respectively with Tonnage,
Imports, and Statistics, which, subject to the general supervision of the
Main Executive Committee, co-ordinate the work of the several Divisions
in detail.
1. Main Bncotive Gommittee ( = the Allied Maritime Transport Executive).
The Main Committee consists of the following heads of the several
National Divisions : —
Mr. J. A. Salter (Chairman).
M. Monnet (France).
Professor Attolico (Italy).
Mr. G. Rublee (U.S.A.).
The Main Committee may be generally described as the E«xecutive of
the Council. Its general responsibilities are to secure the necessary
ESxecutive action to give effect to decisions by the Council, to prepare
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AND ASSOCIATED ALLIED BODIES 299
information relevant to any question that the Council may desire to
consider at any future meeting, to suggest definite proposals for the
approval of the Council, and in general to take such Executive action as
is desirable and practicable, in pursuance of the general duty of assisting
in the allocation and most advantageous use of Allied tonnage by co-
operative action.
2. Ttamiage Sab-Gommittee.
M. Revillon (France).
Lieut. Farina (Italy).
Mr. Shearman (U.S.A.).
Itfr. Bfowett (Great Britain).
Functions : —
(a) To arrange for the due execution of any decision of the Council
involving the co-operative use or programming of tonnage.
(b) To obtain and make available for general use statements showing
the amount and disposition of the tonnage under the control
of each Ally.
(c) To examine proposals made by any country with a view to
securing a more advantageous use of tonnage under the control
of any Ally (whether by the better disposition, routeing, or more
co-operative use of the tonnage or the better assignment of
cargoes in relation to import programmes), and so far as
possible to arrange that agreed improvements shall be carried
into effect.
(d) To report to the Main Committee as to the due performance of
the above duties.
3. Imports Sab-Committee.
M. Halgouet (France).
Professor Attolico (Italy).
Mr. Morrow (U.S.A.).
Mr. 6. M. Booth (Great Britam).
Functions : —
(a) To arrange for the due execution of any decision of the Council
as to import programmes, by communication as may be neces-
sary with the respective Executives or through the National
Divisions with the respective Grovernments.
{b) To obtain (whether through the Executives or otherwise) and
make available for general use statements showing in detail
the import requirements (with sources of origin, &c.) of the
different countries, with such further information as may be
desirable in order to show the relative necessity of the different
requirements,
(c) To examine the import programmes as so obtained, whether
through the Executives or otherwise, and to ascertain in what
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800 ALLIED MARITIME TRANSPORT COUNCIL
dbrections reductions can be made most equitably as betwe^i
the different countries and with least injury to the prosecution
of the war.
(d) To report to the Bfain Committee as to the due performance ot
the above duties.
4. Staiiitioal 8ub-CfQinmittee.
M. Seitert (France).
Signor Pardo (Italy).
Mr. J. A. Field (U.S.A.).
Mr. Palin Elderton (Great Britain).
Functions : —
(a) To propose appropriate and uniform methods for ccdlecting and
investigating data bearing on the work of the Allied Maritime
Transport Council.
{b) To examine and pass all data and statistical conclusions based
thereon.
(c) To keep record of all actions under (a) and (b).
(d) To arrange for records to be kept showing the extent to which
any decisions of the Council as to allocation of tonnage or
rearrangement of supplies are being comjdied with, and for that
purpose to consider statistical principles which are to form
the basis of such a record.
(e) For the due performcmce of the aix>ve duties, the Sub-Conunittee
will keep constantly in contact with the Tonnage and Imports
Sub-Committees, and provide such statistical information and
assistance as those Sub-Committees may require ; and will report
to the Main Committee.
*' NanrNatianal ' Secretariat. (Secretary, Mr. J. F. Henderson.)
Members of this Secretariat are of different nationalities, but
on entering the Secretariat divest themselves of any national
point of view. The duty of the Secretariat is to give executive
and administrative effect to the policy decided upon by the
Council and by the International Committees. This Secretariat
has included Mr. Davis as head of the Statistical Section and
M. Simon for munitions requirements.
Shipping Intelligence Section. (Mr. 6. V. Howell, O.B.E.)
The Shipping Intelligence Section, which has been transferred
from the Ministry of Shipping, keeps a continuous record of the
position and employment of all ocean-going vessels of every
nationality.
Anodatod Allied BodiM.— Programme Ckmunittces.
Programme Committees have been established to cover almost the
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DEVELOPMENT OF PROGRAMME COMMITTEES 301
whole range of imported commodities, separate Committees being formed
for—
(1) WooL
(2) Cotton.
(8) Flax, Hemp, and Jute.
(4) Hides and Leather.
(5) Tobacco.
(6) Paper.
(7) Timber.
(8) Petroleum.
(9) Coal and Coke.
In addition, a Food Council has been established co-ordinating the
work of Executives or Committees for —
(10) Cereals.
(11) Oil Seeds.
(12) Sugar.
(18) -
Meats and Fats,
and a Munitions Council with. Sub-Committees for —
(14) Nitrates.
(15) Aircraft.
(16) Chemicals.
(17) Explosives.
(18) Non-Ferrous Metals.
(19) Mechanical Transport.
(20) Steel.
DOCUMENTS Nos. 6 and 7
The two following documents illustrate the functions of the
Programme Committees, the current method of working of the
Executive in relation to them.
No. 6 gives working rules issued to the Committees in May.
No. 7 consists of correspondence between the Executive and
the Food Council with regard to the Food Programme for the
Fifth Year.
DOCUMENT No. 6
DEVELOPMENT OF PROGRAMME COMMITTEES
Copy of Memorandum issued on May 25, 1918^ by Allied Maritime
Transport Council Executive.
At the Paris Conference of December last the question of Allied imports
and tonnage was considered, and with a view to making the most advan-
tageous use of the available shipping it was agreed by the Allies that
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302 DEVELOPMENT OF PROGRAMME COMMITTEES
^ America, France, Italy and Great Britain will all tabulate and make
' available to each other a statement showing in detail and as neariy as
^ possible in the same form each class of requirements for which tonnage
*' is needed, and secondly the tonnage available and likely to be available
' through new building, &c« These requiremoits having been classified
^ (showing the source of supply, &c.) and having been adjusted — (a) to
^secure a reasonably uniform standard of adequacy both as between
' classes of conmiodities and as between coimtries, and (b) to bring the
' total within the carrying capacity of the Allies as a whole, will form the
' basis on which the general allocation of tonnage will be determined.'
As a result of decisions taken at that Conference the Allied Maritime
Transport Council was formed, consisting of Ministers from each of the
three chief European Allies with a delegate from America, and was charged
with the duty of examining the use of all tonnage under Allied control
with a view to allotting it to the services most essential to the prosecution
of the war. The Council's powers are limited to making recommendations
for action to the respective Grovemments, who retain final control over
the movements of their own ships.
As there is a general shortage of shipping when set against import
requirements, it was realised that the Council's recommendations would
necessarily involve decisions not only (a) on the relative importance of
the various import requirements, but also (b) on the relative needs of the
several Allies for a particular conunodity. It was therefore further
decided at Paris, for the purpose of obtaining the best opinion as to the
total amount required of a particular commodity, and as to its distribution
among the Allies, that Allied bodies (Programme Committees) should be
formed for the different main requirements (food, munition, raw materials,
&c.) on the model of the Wheat Executive, America being associated with
these bodies. It was contemplated that the formation of expert Allied
bodies of this nature would greatly simplify the work of allotting tonnage,
as considered progranmies for each article would be rendered available,
and that where the total of all the progranunes exceeded the carrying
capacity, the A.M.T.C. would be able to discuss possible reductions of
programmes with the Conmiittees before proceeding to make recom-
mendations to the Allied Grovemments as to what reduction must be made.
It may be conveniently stated here that the A.M.T.C. will work in
close co-operation with the Inter-Ally Council on War Purchase and
Finance, documents being interchanged between the two Councils, and
that it is understood that the latter Council are strongly in favour <^ the
appointment of Programme Committees to assist them in their task of
considering imports in relation to finance.
At their last session in Paris on April 28rd to 25th, the AJIf.T.C
adopted a statement as to the general tonnage and import position for
1918, showing that the import programmes of the three European Allies
for 1918 exceeds the carrying capacity available by some 8| mOIion tons.
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DEVELOPMENT OF PROGRAMME COMMITTEES 303
It is, therefore, urgently necessary that these import programmes should
be revised and reduced. Except in the case of cereals^ meats and fats,
and nitrates, the demands of each Ally for a particular commodity have
not been criticised by a joint Allied body dealing with that commodity.
The Council accordingly felt that it was imperative for the Allied Grovem-
ments to proceed at once with the formation of joint expert bodies which
should investigate the demands for commodities other than cereals and
nitrates. ...
The associated Grovemments are anxious that the Progranune Com-
mittees should be instituted and commence their effective work at the
earliest possible date.
From the point of view of the A.M.T.C. the work which it is hoped the
Programme Committees will undertake may be provisionaUy described
as follows : —
(i) To obtain such information as is necessary to determine the require-
ments of each Allied country for the commodity or class of com-
modities with which the Programme Committee is concerned,
including past consumption and stocks,
(ii) To secure effective Allied criticism of the requirements so that
the programme distributes the sacrifice entailed by any necessary
shortage as equally as possible between the different countries,
and in such a way as to be least injurious to the prosecution of
the War.
(iii) To prepare a programme for such period or periods, and on such
a basis as the Council may desire, the programmes of all being as
nearly as possible comparable and uniform, and also being so
designed as to enable them to be readily adjusted to tonnage
calculations in view of the varying strain imposed upon tonnage
according as the country of shipment is near or distant. (Appro-
priate forms are being circulated by the A.M.T.C.)
(iv) To forward the progranunes so prepared to the Council with all
such supplementary information as to stocks, &c., as will facilitate
a decision between the competing claims of classes of imports for
tonnage.
(As regards the competing claims of different coimtries for
their share of a given commodity it is desirable that in every
possible case the Programme Committee should agree upon the
distribution without appeals to the Council, the Council's main
consideration being, e.g.y the competing claims of cereals and
munitions, not the competing claims of France and Great Britain
for cereals.)
(v) To discuss possible reductions of programme with the Council and
its permanent organisation when forecasts of avaOable tonnage
show a deficiency as compared with the total of all programmes.
The present position being that a reduction of imports is inevitable,
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304 FOOD PROGRAMMES
it is proposed, as soon as the total requirements of the Programme
Committees have been examined afresh in relation to the tonnage
expected to be available during the rest of this year, to make
a provisional plan for reduction which will bring the total imports
within the capacity of the tonnage, and to ask the several Pro*
gramme Committees what redistribution they would make among
the Allies on the assumption of such a reduction and what would
be the position of each country as a result, having regard to its
stocks, &c.
25th May 1918.
DOCUMENT No. 7
FOOD PROGRAMMES
Correspandence between Allied Maritime Transport Council and
Food Council.
(a) Letter from Transport Council to Food Council.
dOth July 1918.
I am directed by the Allied Maritime Transport Council to forward to
you herewith, for the information of the Food Council, the following
observations as to the tonnage position in relation to the Food Programmes
which are now under consideration. • . •
1 am to state generally with regard to the tonnage position that while
it is true that world building has now reached world losses, this fact is due
to the large excess of American building over American losses, and the
American excess thus resulting is not available for general European
unports in view of the needs of the American army. Taking the building
of the rest of the world against the losses of the rest of the world, which
for the above reason offers the niore reliable index of the tonnage available
for the European Allies, I am to point out that there is still each month
a serious excess of losses over building, the excess of such losses amounting
in the first six months of this year to 1| million tons dead weight.
Apart from this very general statement of the tonnage position,
a simple criterion is afforded as to the value of effecting any given saving
in tonnage, as against a loss from other points of view, by the fact that
America can send, and the Military Authorities desire, more American
Troops in Frahce than the available and prospective tonnage is adequate
to transport and supply. It follows, therefore, that any saving in tonnage
directly increases the number of American Troops in Fjcs^ce, and it may be
stated with approximate accuracy that each 5,000 tons of imports saved
means that a further 1,000 American soldiers can be supplied, and there-
fore sent to France, than would otherwise be possible.
If, therefore, the Food Council has at any time under consideration
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FOOD PROGRAMMES 309
two alternative courses, one of which offers certain advantages from the
point of view of finance, or the comfort of the civilian populations, while
the other offers the prospect of saving tonnage, it will be possible to
measure the cost to the Allied cause of taking the first course by reckoning
that for each extra 5,000 tons of imports involved in it there must be
a reduction in the number of American soldiers in France by 1,000,
The Food Council now has the great advantage of knowing precisely
what has been the consumption in each country of each important food
conunodity during the past year. In view of the continued shortage of
tonnage, and the special reason indicated above for economising to the
utmost possible extent, I am to express the hope that the Council will find
it possible to take the record of total actual consumption during this last
cereal year as setting the maximum limit to the proposed programme
for the ensuing year. This does not, of course, necessarily mean that
there would be no increase in any particular commodity, but that if such
an increase is necessary it should be used to relieve the requirement for
, some other commodity as compared with last year's consumption. The
application of this principle would of course mean the continuance of
imports on the basis of last year, subject to a reduction or increase where
there has been any improvement or reduction in home production, and
with such further adjustments in relation to stocks as are required to keep
these above, but not unnecessarily above, the point of danger.
Apart from reducing total requirements for food in the different
countries to a minimum, the Council will also doubtless have in mind the
necessity of arranging programmes in such a way as to involve the smallest
strain upon tonnage, whether by drawing supplies from the nearest source
or by obtaining them in such a form as to involve least bulk and weight
in relation to food value.
It will of course be realised that this letter is only intended to give
a very general indication of the tonnage position and of certain principles
which are being suggested to all the various bodies now considering pro-
granunes of Allied imports. It is now addressed to you in the hope that
the consideration of the food progranunes from the commencement in the
light of the above suggestions may reduce and. facilitate the work of
subsequent re-adjustment of progranunes between the Transport Council
and the Food Council in relation to the total tonnage available and the
demands upon it from all other sources. ^
(b) Resolution of Food Council communicated to
Transport Council.
ResoluHan.
3Ist July 1918.
The letter of the Allied Maritime Transport Coundl of ta4ay having
been laid befmre the Food Council, the Council wishes to state that while
it agrees with the absolute necessity of minimum use of tonnage, and has
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306 FOOD PROGBAMMES
in itself been created for this purpose, yet the basis of calculation of
imports to England, France, and Italy upon the foundation of last year's
imports, less increase of production, simply means a repetition of the
food difficulties of last year. We wish to state emphatically that the
morale of the people will be most seriously endangered by such a basis of
imports. The Food Coimdl puts forward as a more constructive basis
the employment of the same ship ton mileage during the coming year.
80th July 1918.
(c) Letter from Transport Council to Food Council.
5th August.
I am directed by the Allied Maritime Transport Council to acknowledge
the receipt of your letter of the 81st July conveying a copy of a resolution
passed by the Food Council on July 80th with reference to the Transport
Council's letter of the same date.
The Transport Coimdl much regret that the Food Council express
dissent from the suggestion that, in the framing of the food programmes
for the ensuing year, the total consumption during the past year should
be taken as setting the maximum limit, t.^., that the imports should be
not greater than what is required in combination with home production,
to allow consumption in total on the same scale as during the last year
(with such variations as may be desirable as between different commodities
or countries) and to keep stocks above, though not unnecessarily above,
the point of danger.
The Transport Council feel bound to repeat their opinion that in view
of the tonnage position this is a reasonable principle to adopt in framing
the food programmes, and think it may be convenient to the Food Council
to state, at this early stage, that they can offer no prospect whatever of
being able to arrange tonnage upon the principle suggested by the Food
Council.
I am to observe that —
(1) The application of the principle suggested by the Transport
Coimdl would not involve the repetition of such difficulties as arose
last year from any local or general depletion of stock rendering
distribution impracticable.
The principle suggested is that imports should be such as not to
allow for actual constunption on a bigger scale. (It will be observed
that the prindple as defined in the Transport Council's letter differs
in this respect from the reference to it in the Food Council's resolu-
tion.) It is not of course the wish of the Transport Council that
stocks should be reduced to such a point as to cause actual privation
of some of the necessities of life in certain areas.
(2) The general tonnage position has been indicated generally
in the Council's previous letter. In a shipping position rendered
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FOOD PROGRAMMES 307
more difficult by the large net losses of tonnage available for European
service and by the effect of the American Army programme, the one
substantial factor of relief was the better harvests in the three
European Allied countries and in the nearest source of America.
If the principle of the Food Council were accepted this one factor
of relief woidd operate solely to the advantage of food and would
not only mean that no assistance would be given in supplying the
American Army, but that the. imports of the European Allies other
than food would in addition be reduced in correspondence with the
net losses of European tonnage. This is, in the opinion of the
Transport Council, a situation which it is impossible to contemplate.
In the above circumstances the Transport Coimcil will not feel justified
in asking the military and munitions authorities to reduce their demands
upon tonnage (with a consequent reduction of the numbers of American
soldiers available for next year's can)paign) in order that such tonnage
may be allocated to food as to enable and encoiirage consumption upon
a more generous scale than during the past year.
»
DOCUMENTS Nos. 8-16
No. 8 criticizes the programme of the Food Council for 1918-19,
see pp. 308-10.
No. 9 is the report of the Executive prepared for the fourth
meeting of the Coimcil. This docmnent illustrates more clearly
than any other formal document the method of working of the
Council and Executive at their period of fullest development.
It includes a review of the shipping and supply position for
the fifth year and is perhaps the most important document
here reproduced, see pp. 204-10.
No. 10 gives the shipping position of the Allies at the beginning
of the final period of the war.
No. 11 gives proposals of Transport Executive and members
of the Programme Committee of the Food Coimcil, designed to
secure the immediate use of the German tonnage by provisions
in the Armistice, see p. 219.
Nos. 12 and 13 describe the allied organization at the time of
the Armistice.
No. 14 states the proposals made by the British Government
to the other Allied Governments with regard to the continuance
of the Transport Council in the form of a General Economic
Coimcil for the Armistice period.
X2
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808 PROGRAMME OF FOOD COUNCIL 1918-19
No. 15 is a note written in Dec. 1918 summarizing the ship-
ping position after the Armistice.
No. 16 gives the tonnage agreement with France of the 22nd
January 1919, in which the allocation of tonnage was placed on
a financial instead of a ' programme ' basis, see pp. S32-3.
DOCUMENT No. 8
CRITICISM OF PROGRAMME OF FOOD COUNCIL
FOR YEAR 1918-19
1. The programme shows a total requested increase of about 4 J million
tons on the actual importation figures for the Cereal Year 1917-18.
2. It is understood that the following statement was made by the
different countries as to the cereal crops this year compared with last year :
Increases,
Tons.
U.K 950,000
France 458,000
Italy 509,000
Total ^.^^{'^ttri^^
In the case of the U.K., however, it was indicated that failure in other
crops made the total harvests of only about the same feeding value as
last year,
8, These statements of the harvests are much less favourable than
previous indications of the prospects, and estimates at this date are
necessarily only provisional. Even as the estimates stand, however, it is
to be noted that the increased importation of 4( million tons is made in
conjunction with large admitted increases in the cereal harvests.
4. The great increase of nearly 1^ million tons in military oats clearly
requires investigation, as it is not known that the British and French
armies or their horses are likely to increase. The Food Council have been
asked to investigate this, and it is, of course, important that the Transport
Council should know whether allowance is made for any supplies to the
American Army directly or indirectly.
5. The Memorandum accompanying the Progranune indicates an
intention to deal with any deficit on the full progranune by dividing that
programme over each country into a Priority and a Balance Importation.
The Priority is as follows : —
U.K. France. Italy. Total,
10-64 4-22 3*74 18-5
this priority excluding Military Oats.
6. This means in effect that if the scheme is accepted and the respective
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PROGRAMME OF FOOD COUNCIL 1918-^19 309
Governments agree to allot tonnage in accordance with it, the importations
would be constantly kept as nearly as possible in accordance with the above
ratios. The remainder of the Progranmie is divided as follows : —
U.K. Fraaoe. Italy*
4-68 2-72 M7
these different ratios being worked to the extent, if any, to which importa-
tions exceed the priority quantities.
7. It is quite clear that the apfdication of the principle of the Allied
Maritime Transport Council (viz., that importations should not be more
than at the maximum such as to enable consumption during the ensuing
year to be on the same scale as during the past year) would not admit
within several millions of tons of the importations requested in the full
programme. Whether or not it would give importations equal to the
priority figures depends upon the actual realization of harvests in the
different countries, and home meat, &c.
8. It is dearly impossible for the Transport Council to guarantee any
absolute quantity of importations in the absence of further information
as to the harvests and (still more important) as to the requirements of the
American Army. On the other hand, it is understood to be essential that
the Food Council should have some immediate indication of their probable
imports, as important and urgent executive action (such as regulations as
to milling extraction, decisions as to the amount of feeding stuffs to be
provided to the farmers and, therefore, as to the poUcy of slaughtering
cattle, and also as to the method and extent of rationing) has to be taken
at once.
9. In these circumstances it is suggested that the Council should
reconunend that the programme should be commenced on a purely
provisional basis and [subject to adjustment in the light of harvests and
other competing demands for tonnage] on the basis of the quantities
covered by the priority figures [a definite warning being given to the Food
Council that while no quantities can be guaranteed the Council is not able
to see any prospect of arranging importations on a more liberal scale than
the above].
10. A supplementary statement as to American Food Imports is
included in the attached papers, but there is no arrangement in the Food
Council's general scheme for an American priority on the same basis as
that specified for the European Allies, and with the same implication that
it is not to be exceeded unless the other priorities are also exceeded. The
Transport Council will doubtless consider it of importance that the
American import progranune should be worked into the general programme
on the same basis as the others.
11. In present circumstances it must be clearly realised that the
acceptance of the priority system as a basis for the allocation of ships
must involve the diversion of British ships to supplement deficient importa-
tions into France and Italy.
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SIO PROGRAMME OF FOOD COUNCIL 1918-19
12. It is understood that in view of paragraph 11 the acceptance of the
principle as a working basis by the British Ck>vemment would in any case
be on the understanding that —
(a) the arrangement must be regarded as provisional and voluntary
and subject to cancellation if necessary ;
(b) that a satisfactory agreement is arrived at as between the different
AlUes as to their putting a specified quantity of tonnage into the
Food Programme and/or carrying defined quantities of food in
their own ships ; and
(e) that the continuance of the arrangement will necessarily be subject
to the inclusion of America on equal terms at an early date.
18. If the above poUcy is recommended by the Transport Council and
accepted by the different Governments, arrangements are at once necessary
to give executive effect to the new policy. In effect, this policy means tbt
extension of the arrangements which have been in force as regards the
importations of cereals to all Food within the priority figures.
14. The administrative arrangements of the Transport Council to give
effect to the above policy must necessarily depend to some extent upon
the Food Council's organisation. If, as presumed, the Food CouncU
arranges for the machinery to follow the lines already adopted for cereals,
the demands for tonnage for all Foodstuffs would be centralized through
a Freight Committee of the Food Representatives' Committee.
15. •Within the Transport Council's organisation the Tonnage Com-
mittee would be primarily responsible for insuring the executing of
paragraph 12 (b). It should include Executive Officers with authority,
on behalf of the respective Governments, to give or reserve assent to any
proposed diversion of national tonnage, and to make consequent arrange-
ments with the Freight Committee.
16. The above arrangements being made, the Shipping Department
of the Food organisation would deal on executive questions of detail witli
the actual Shipping authorities of the four countries resident in Lond<m
as to the execution of their several parts of the common plan«
August 27th, 1918.
DOCUMENT No. 9 (see p. 204)
ALLOCATION OF TONNAGE IN THE CEREAL YEAR 1918-19
I. — General Note.
The Council will require to consider at the session commencing on
September 80th the main policy which is to govern the ailocaticm of tonnage
in the Cereal Vear 1918-19. This will involve the consideration of —
(a) The programme for the American Army#
(6) Food Imports.
(c) Munitions Imports.
(d) Imports of Raw Materials, &c.
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ALLOCATION OF TONNAGE 19ia-19 311
II. — Statistical Estimate of Carrtino Capacity.
The policy to be adopted in determining the limits of the different
programmes of importations must necessarily be based upon the best
possible estimate of the carrying power of the available tonnage.
The Statistical Departments of the four countries associated with
the Allied Maritime Transport Council have been engaged in a careful
investigation^ and have agreed upon an estimate of the position.
Actual experience may always, of course, be either better or worse
than any estimate however carefidly made. An estimate of tbis kind
results from the consideration of a vast number of complex factors on
any one of which any single person may take a more or less favourable
view, but such factors tend to cancel out.
The estimate, as presented, represents the unanimous view of the
professional experts of €kll the four countries, and €ks such the Executive
consider that it must clearly be accepted as the best, and, indeed, only
possible, basis on which to consider policy. It is necessary to emphasise
the character of the estimate, and the international authority behind it,
because of the nature of the situation which it discloses. The substance
of the estimate may be briefly summarised as follows : —
After allowing for the requirements of the Fleets and of the several
existing military expeditions, the maintenance of bunker supplies, the
minimum requirements of Colonies, such definite obligations as Belgian
Relief, the conveyance of coal to Norway in return for tonnage (which
must be regarded at least in the first instance as irreducible demands upon
shipping), it is estimated that the total imports (excluding mineral oils
other than lubricating oil, but including military oats and military food
shipped direct to the forces) which may be brought into the three European
Allied countries (on the assumption that the allocation of tonnage as
between America and the European Allies remains as at present), amounts
to—
/For Coal
Raw Materials
Food
Munitions
72*5 million tons .
for the three European Allies,
including 25*2 million tons of coal for France and Italy, certain commo-
dities mainly conveyed in tonnage not transferable to other imports,
viz.. Si million tons of timber and paper and 7^ million tons of ore,
1^ million tons of sundry foodstuffs, and i a million tons of sundry raw
materials.
From the point of view of the Transport Coimcil the problem can be
conveniently narrowed by the immediate exclusion of coal on the basis of
accepting the above figures. The Council has agreed that the supply of
coal to Italy cannot be reduced below the minimum figure of 600,000 tons
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812 ALLOCATION OF TONNAGE 19ia-19
a month, and any variation in the French provisional figure would have
a comparatively small effect on other imports. This leaves —
{For Raw Materials'^
„ Food i^ for the three European Allies,
,, Munitions J
including military oats and the above-named non*transferable imports.
It is on the basis of this figure that p(dicy requires to be determined*
III.— Note on Future Tonnage Position.
On the best view that can be formed the whole Allied tonnage position
will be very substantially improved by the summer of 1919. By that date
America's building on the estimate of Secretary Baker and General Hines
should amount to twice the present rate and be still increasing. This
factor is of the first importance in considering the policy of allocation
throughout this cereal year, as it should enable stocks of all kinds to be
run down to a point which would otherwise be unjustifiable.
IV. — ^Raw Materials.
It is neither practicable nor necessary for the Council to consider in
detail at this session the Import Programmes of the different raw materials.
The programmes and relevant information are not sufficiently comidete
for the purpose. Moreover the possible variation in the imports is not so
great as to affect very substantially the major decisions as to allocation
between Food, Munitions, and American SuppUes. 8| million tons of
timber and paper and half a million tons of sundry raw materials may be
at once set aside because, as indicated in the statistical estimate, they are
brought in tonnage not transferable to other imports. The other main
commodities under this cat^ory are Wool, Cotton, Flax, Hemp, and Jute,
Leather, and Tobacco. The Council at the last session decicted that until
fiurther order actual recorded consumption of raw materials during the
past year shotdd be taken as setting the maximum limit for imports for
the ensuing year. No substantial reduction upon the imports implied
by this principle is practicable. In view of the extent to which the raw
materials in question are used for military as well as civilian purposes at
least a fiurther d|inilUontons(to include various miscellaneouscommodities)
must be allowed, making the total of this category 7*5 million. In any
case the variation from this figure would not be of the first importance.
This would leave —
89-8 miUion tons /^^' Mmdtions} '^' *^^ ^^^ European Allies.
V. — Food Imports.
The general position remains as stated in the memorandum circulated
to the Council at the last session which the Executive ask to be read in
conjunction with this memorandum. The Council decided that the
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ALLOCATION OF TONNAGE 19ia-19 813
programme was to be commenced on the purely provisional basis of the
quantities covered by the priority figures (18-5 million tons excluding'
military oats), on the imderstanding that the figures would be recon-
sidered as soon as full information was available. As far as military oats
are concerned, the old progranune of importation was to continue until
the matter has been further considered.
No information of importance has been received affecting the amount
of the harvests, nor has the Food Coimcil concluded its investigation into
the question of mQitary oats.
The Executive, however, desire to call attention to the following main
facts of the position :
(a) The total importations in the past year, including military oats,
amounted to 22^ million tons, or 20^ million tons excluding mili-
tary oats.
{b) The provisional estimates of cereal harvests give increases amounting
to 1,912,000 tons for the three countries, though in the case of the
United Kingdom it was indicated that there had been a com-
parative failure in other crops,
(e) In one important respect the food position is more favourable than
last year. At the critical period of that year there was a shortage
of wheat in North America. This year there will be a large
exportable surplus ready for immediate shipment if emergency
arises, and a very large volume of tonnage in the Atlantic capable
of being rapidly used for cereal transport in case of absolute
necessity.
(d) The general principle adopted by the Council has been that impor-
tations this year should not be more than at the most to enable
consumption to be on the same scale as during the past year.
If it proved possible to limit all articles in the food programme, including
military oats, such oilseeds, &c., as are used for other than food purposes,
plus any foodstuffs as come in without regulation and outside the pro-
gramme, to, say, 22 million tons, this would leave —
17-8 mUlion tons /^**» f°' 5"?^i.° munitions and
Lany supplied by Europe to Amenca.
VI. — ^Munition ^ports.
The postponement of the Munitions Coimcil until 28th September has
unfortunately prevented the preparation by the munitions authorities,
and consideration by the Transport Executive, of the full munitions
progranune, and it is not possible, therefore, to state how serious the
deficit in that programme will be. It is, however, understood that the
total progranune (including phosphate rock and provision for the supply
to the American forces of French and British artillery and ammunition)
will amount to about 22 million tons.
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814 ALLOCATION OF TONNAGE 1918-19
This leaves a provisional deficit of —
4*2 million tons
allowing for provision of artillery
and munitions to America but not for
further direct cJlocation of tonnage.
VII. — Supply Prooramme foe American Army.
The enlarged American troop movement recommended by the Supreme
War Council and approved by the President of the United States would
require for supply tonnage (according to estimates submitted by Secretary
Baker and General Hines) a supplement to American tonnage amounting
to 1,200,000 tons from August lOlS, reducing month by month to 200,000
tons in February 1919, and then ending.
This amount of tonnage would transport about 2,000,000 tons d.w. of
cargo, and its allocation to the supply programme of the American anny
would, therefore, involve a further reduction of about that quantity <rf
imports to the European Allies.
The estimate is based upon —
(a) An allowance of 80 lb. a day per man of stores from the United States,
and
(6) 250,000 tons a month in addition for constructional materiaL
It allows for the absorption of American new building in the Army
Programme, and also for the withdrawal of a considerable amount of
tonnage for the same purpose from other American services.
The Executive would desire to make the following observations :
(a) The 80 lb. a day per man is necessarily a rough estimate. It is in
addition to commodities, e.g., coal, forage, or timber obtained
from the United Kingdom or France.
(b) On the other hand no allowance appears to have been definitely
calculated for the conveyance of horses, which is an important
factor,
(e) It is observed that the calculations allowed for bunkering for the
round voyage in America. This, though now necessary in view
of the reduced production of coal in the United E[ingd<mi, means
a great waste of cargo-carrying capacity.
(d) While the estimate is incomplete for the above reasons the net
conclusion does not appear to give an excessive estimate of the
requirements of the American Army raised to 80 Divisions by
July 1919.
{e) It is understood that the Munitions Council is now considering laige
supplies of artillery of France and Britain to America. These
arrangements, if concluded, would increase the import require-
ments of France and Great Britain and correspondingly rdieve
the requirements of America for transport from the U.S.A.
For the above reasons the Executive do not consider that it is
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ALLOCATION OF TONNAGE 1918-19 315
possible to deal with the Programme as a whole, but that considera-
tion must be confined to the immediate future.
It does, however, appear clear that whatever be the case for
a further period the American Government have a serious need
for more tonnage than is now at their disposal during the next
few months, especially during October and November.
(/) Arrangements have been made to provide Allied tonnage to the
extent of 200,000 tons for loading in September and October with
a further increase up to, say, 50,000 tons if the allocation of further
tankers enables the use of double bottoms for oil fuel to be dis-
continued. It should be noted that the provision of this tonnage,
unless replaced within the cereal year, would diminish fro tanto
the amount of importation allowed for in the earlier part of this
memorandum.
(g) The estimate which shows a deficit of American tonnage to the
end of February shows a surplus from March onwards which
amounts to over three-quarters of a million tons by July and
should increase continually afterwards.
(h) It is impossible to state the exact way in which Allied tonnage
should be distributed so as to give maximiun assistance to the
war efforts between American Army Supplies, American Import
Services, European Army Supplies and European Import Services
except after a detailed examination of each service one by one by
the Allies as a whole. This, of course, is precisely the purpose for
which the Allied Maritime Transport Council and the associated
Allied machinery, and the Food Council and Munitions Council,
and the Programme Committees were formed.
VIII. — Recommendations.
In view of the general position indicated above, the Executive make
the following recommendations :
Munitions in Winter: Food qftertoards.
(1) That during the later Autumn and Winter a general preference shall
be given to the transport of munitions and Army supplies as compared
with food.
(2) That^ when necessary, but as late as possible xxAthout running undue
risk of actual shortage of foody a similar preference shall be given to the
transport of food in tiie spring or early summer.
These recommendations are made in view of the fact that, during the
winter, stocks will be relatively high, as the harvests will not have been
consumed, whereas shipments of munitions and Army supplies are required
at that period, in order to assist the fighting in the spring and summer.
It is recognized that the extent to which the suggested policy can be
applied will be limited by a number of traffic and practical considerations ;
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316 ALLOCATION OF TONNAGE 1918-19
e. g.9 the congestion that might arise from stoppage of wheat exports firom
U.S.A. and the importance of using the St. Lawrence Ports whUe they are
still open.
Reduction of Stocks.
(8) That in view of the prospect of substantial improvement in the whok
Allied tonnage position by next summer^ and in order to avoid reducing the
shipment of essential commodities required for actual consumption during
the year up to August {particularly Munitions)^ aU Supply Departments
should be asked to effect a reduction of stocks until they approximate^ towards
the end of August, to the quantities required for actual distribution.
The most important eonmiodities to which this principle will apply
are nitrates^ cereals, sugar, and oil seeds. Its application should be easier
because of —
(a) The increasing production of nitrates in France and the United
Kingdom, and
(b) The existence of a large stock of wheat in the near source of North
America ready for immediate export if a crisis occurs, and a great
volume of tonnage in the North Atlantic capable of being used if
necessary for emergency shipments, the position in 1918 being in
these respects much more favourable than last year, and enabling
a reduction of stocks in Europe to be made with much less risk.
In pursuing this policy the Supply Departments can do so with the
prospect of —
(a) Having emergency shipments of cereals in the spring if necessary,
even at the cost of reduced embarkation of American troops at
that date.
{b) Increased shipments of sugar in the summer and autumn and there-
after adequate shipments of cereals.
Raw Materials.
(4) That the principle provisionally approved at the last session for ran
materialsy viz., that acttud recorded consumption of last year should be taken
as setting the maximum limit for programmes for the ensuing year^ should
continue to be applied
Food.
(5) ThcU 18*5 million tons of importations of aU articles included in Ae
Food Programme, except Military oats, should be confirmed as ihefigutefot
the year.
In recommending this figure the Executive have before them from the
Food Council the definite statement of the British Representatives that,
on their present estimates, which allow for a substantial increase in the
slaughtering of cattle and pigs and for the restriction of imported foodstuffi
to the needs of the dairy herds, the present British proportion of the 18*5^
viz., 10-5, will not prove a possible figure.
Recognising the possibility that the policy recommended (viz., working
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ALLOCATION OF TONNAGE 1918-19 317
on the basis of 18-5 and shipping less than the proportion of that quantity
during the earlier months) may result in a really serious food position later
in the cereal year, the Executive recommend —
(6) Thai if the food position at the end of the winter or later shows such a
course to be necessary in order to avoid food shortage, food shipments shall have
priority in excess of the proportion due on the 18'5 basis at the expense of
tonnage allotted to other services,
(7) That the importation of military oats should still be continued provi-
sionally on the basis of the old programme pending afuU report of the whole
situation.
(8) That for the purpose of considering the tonnage available for other
services the total importations of food {and all other articles included in the
Food Programme), including M miscellaneous foodstuffs and military oats,
should be provisionally estimated at 22 miUion tons.
Munitions,
(9) That in estimating what is available for the European Munitions
imports it should be provisionally assumed that any tonnage assistance
rendered to America, whether by the allocation of ships or the supply of
artillery, will be returned within the cereal year, thus leaving 17-8^ million
tons for European munitions, including ore, pyrites, phosphate rock, railway
material, and lubricating oil, but that it should be recognised that this requires
reconsideration after examination of the munitions programme, and in
particular of the arrangements there proposed for supplies to the American
forces.
Coal.
(10) T?iat the strongest recommendations should be made to the British
Government as to the immense importance to the entire Allied supply position
of increasing the production of coal.
It should be pointed out that the importation of coal from America,
which has been suggested for the American Army in France, and even its
importation in the form of double bunkering of vessels, is extremely
wasteful. The conveyance of 5,000 tons of coal from America involves
the shutting out of 5,000 tons of other stores and (supply tonnage being
the limiting factor to the American Military Programme) this involves
the loss of 1,000 American soldiers in France. As against this, 5,000 tons
of coal can be produced in a year by 20 men. Some allowance must, of
course, be made for the tonnage required for conveyance of coal from the
United Ejngdom to France, but the advantage of suppljdng coal from the
United Kingdom remains very great.
American Army Supply.
(11) That the action taken in the allocation of 200,000 tons of shipping
{with increases to 260,000 tons if double'boUom shipments are discontinued)
^ Jjk ykfw of later inf onnatioD from the Hiiiutioiis Conneil ahowliiff that the pfogranune
of importations of mtrates from the distant source of Chile is to be reduced, it is cooiBidered
that the figure 17*8 can be raised to 18.
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318 ALLOCATION OF TONNAGE 1918-19
in September and October be confirmed^ and that the Executive be instructed
to endeavour to arrange to increase the allocation' to a total of about 600,000 tons
up to the end of the year in addition to any space which can be made available
by the release of double bottoms.
American Co-operation.
(12) That these arrangements be subject to adequate assurances from
America as to co-operation xvith the Allies through the Allied' Maritime
Transport Council.
The European Allies desire to make it clear that the reduction in their
tonnage threatens them with the definite prospect of a shortage of munition
supplies, and of food in the latter part of the cereal year. The shortage
will be rendered more serious and will be felt earlier if tonnage is now
allotted by them for the American Army service. In practice tonnage can
now only be so allotted by leaving behind breadstuffs in America, and a
shortage of bread, apart from sufiicient assistance by America later,
appears inevitable. The European AUies, therefore cannot take the
responsibility of diverting tonnage from food supplies without adequate
assurance for the future. At the same time, looking at the Allied position
as a whole, it appears right that during the winter (when the recent
harvests are still in hand) a preference should be given in the allocation
of tonnage to the conveyance of army supplies and munitions which must
be brought in now if they are to help the fighting of the early siunmec^
It follows that a similar preference must, as and when it proves necessary,
be given later in the year to food. The European Allies are anxious to
consider America's problem as their own on the basis of full and equal
partnership, and on this basis are now allotting tonnage for the American
Army service. This can only safely be done if America will similarly
identify herself with the European Allies and regard their problem also
as her o¥m. This means in practice identifymg herself with the Allied
machinery of the AUied Maritime Transport Council and the associated
Allied bodies, with the definite intention of having her programmes of
imports and her services requiring tonnage tabled for joint Allied con-
sideration with those of France, Italy,* and Great Britain, and of making
her tonnage with that of the three European Allies available to meet the
most important needs of any of the four countries.
The executive control of her ships would of course be reserved for
America as for the other countries. But what is desired is that America,
like Great Britain, should (subject to the reservation of that ultimate
right) co-operate in the general Allied machinery with the definite intention
of making her ships, like the others, available where it is agreed that the
need is from time to time the greatest.
In order that the Allied co-operation may be effective it is necessary
that the representatives of the several countries on the different Programme
Committees should —
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ALLOCATION OF TONNAGE 1918-19 319
(a) produce their full programmes ;
{b) be fully informed of their Govermnents' policy and be able to discuss
the programme in relation to the other programmes, and within
reasonable limits assigned by their Governments, assent to modi-
fications of the programme ;,
(c) that so far as any (rovemment feel bound to take a different view
as to their ovm requirements in relation to those of the other Allies,
they should normally express that dissent through their represen-
tatives on the Committees and not, except in extreme cases, by
dissenting later from a recommendation of the Committee to
which their representatives had assented ;
{d) that in any case each Government should only make their final
decision after careful consideration of the report of the Programme
Committees and of their representatives on them ; and
(e) that, subject to such dissent and to the ultimate executive power
over their own ships, each country should definitely declare their
intention of arranging the allocation of their vessels in accordance
with the general programmes of the four countries as a whole,
as and so far as they may be agreed by the different representatives.
The European AUies feel that from every point of view the full accep-
tance of such a principle and method of co-operation by America, based
upon the needs of the four countries as they develop, is a more satisfactory
assurance for the future than an arrangement in the nature of a bargain
based upon the extent of the assistance now given. They feel bound,
however, in reviewing the ensuing cereal year as a whole, to state that
they have not been able to effect a reduction in their own programmes
below the total importations which can be conveyed on present estimates
in the tonnage now under their control. That is, in arranging the imme-
diate allocation of tonnage to America or the provision of such commodities
as artillery and munitions which necessitate importation, the European
Allies are doing so in the belief that the application of the above principles
will be likely to result in approximately as great an allocation of tonnage
assistance to Europe later in the cereal year. Later it is of course hoped
that the prospective improvement in the general Allied tonnage position,
resulting from the large increase in American building, will, under the
operation of the above principles, enable the Allied supplies generally to
be raised above the dangerous level to which they must necessarily be
kept do¥m for the present.
American Trooping Programme.
(18) That the Council should not recommend at this moment any reduction
in (he embarkaHon of American soldiers in spite of the grave conditions of
the import programmes as indicated above, hut should be prepared to recom-
mend such a reduction^ if necessary, in the embarkations of next year in order
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820 ALLOCATION OF TONNAGE 191&-19
to meet any crisis that may arise in the imparts of food or other supplies at
the time.
Ptiblic Statement of Position.
(14) That in view of the severe sacrifices that must in any event be entailed
if the American military programme is continued a full statement of the
position should be issued in the name of the Council and through the respeetioe
Crovemments tothe public of the four countries, this statement emphasising the
fact that it is the supreme importance of increasing the Allied forces in France
which is the reason for the sacrifices asked for, and that these sacrifices are
likely to be required only during the winter and spring, the supply position
being thereafter in all probability greatly improved.
In making the above recommendations the Executive realise that,
if adopted, they will cause certain hardship to the consuming public,
injury to many interests, and grave anxiety to controlling Departments.
In view, however, of the supreme importance both of increasing the
American Forces in France to the maximum number at the earliest
possible date and of fully equipping these Forces so that they may attain
the maximum fighting value in the summer of next year, they have not
felt justified in recommending the only alternative course, viz., the reduc-
tion of the American Military Programme on account of the shortage of
tonnage.
2nh September 1918.
DOCUMENT No. 10
TONNAGE AND IMPORTS ON JULY 81st, 1918
At the second session of the Allied Maritime Transport Council, hdd
at Paris on April 28rd-25th, the permanent staff of the Council submitted
a statement of the position for the calendar year 1918 for the three Euro-
pean Allies sho¥dng (1) the provisional programmes of imports for the
year; (2) the total deadweight tonnage required; (8) the estimated
deadweight tonnage available ; and (4) the apparent deficit in deadwei^t
tonnage so resulting, which amounted to 1,890,000 deadweight tons of
shipping.
The tonnage of the United States and their requirements were not
included in this statement, as full information was not available, and
the American Government stated generally that they were relying upon
all their tonnage, including any thereafter required or constructed, fot
their own indispensable imports, for such provision as they wa« already
making for the European Allies, for the service of neutral^ and for their
rapidly expanding military programme.
To meet the grave situation thus pres^ited, the Council reeommended
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T0NNA:GE and imports on 31st JULY 1918 881
an examination of the employment of tonnage on Colonial, Naval and
BClitary work, and that a revision be made of the demands for sueh services
and also for the importation of munitions, food, and other civilian require-
ments.
For the last purpose the Council recommended the immediate extension
of Programme Committees to cover all imported commodities, adding
that it was desirable that there should be an American representative on
each of these Committees who would be a full member in the same sense
as the representatives of the three European Gk)vemments.
These recommendations have been accepted by the four Gk)vemments
concerned, and the Programme Committees are divided generally into
three classes : —
(1) Munitions Committees under the Munitions Council.
(2) Food Committees under the Food Council.
(8) Raw Material Committees.
These have already been organised and have made, or are now engaged
in making, joint programmes of the various commodities required. Details
as to their work and as to the constitution of the Committees are given in
the last Report of Action.
Since the last meeting of the Council the most important events have
been a great increase in the American Military Programme and the
production of the Food Council's Programme for the next cereal year.
The Munitions Council is still working at its programme, and the pro-
grammes of the other Committees are in various stages of completion.
It is clear that the effect of the increased American Military Programme
must react with most important results upon the Import Programmes and
tonnage arrangements of all four countries. The information available
at present is not sufficient to enable any complete balancing of tonnage
resources and liabilities. As the programmes are completed these balances
wOl be effected, and the Programme Committees will be used as an instru-
ment for continually compressing and distributing the imports as between
the different services and the different countries in accordance with the
main principles of the Coimcil, viz., to allot tonnage so as to increase the
war effort to the maximum and to distribute the consequent sacrifices as
fairly as possible among the different countries.
It may be usefid to add the following notes as to the present tonnage
position : —
(1) The most important factors in the present tonnage position are that
world buil^g (including American) now exceeds world losses, but
that Allied or world building (excluding American) is still less than
losses. As the excess of American building over losses is, on the
most favourable computation, less than the increased demands for
the American Army, it follows that the tonnage available for the
needs of the rest of the world, and in particular for the European
Allies, is smaller and is still diminishing.
1569.88 Y
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382 TONNAGE AND IMPORTS ON 31st JULY 1918
(2) As the Council meets, the new cereal year 1918-19 is about to begin,
and it will be convenient, therefore, to make a few notes as to the
prospect for this cereal year as compared with last. The tonnage
under the control of the European Allies is about 2 millian tana
deadweight less than at the beginning of the cereal year 1917-18.
The acquisition of Dutch vessels, and agreements with Norway,
Sweden, and Denmark (off-set by the obligations for Belgian rdi^,
Swiss needs, ftc., which have be^i or are likely to be assumed as
the result of those agreements), may be taken to have given the
European Allies a net gain of about } million tons deadweight.
The carriage of American troops now means a loss of imports
equivalent to the loss of about } milUon tons deadweighL The
net result remains, therefore, that if no more tonnage were
allotted to America, the European Allies would have for their
needs some 2 million tons deadweight less than the tonnage
available one year ago.
(8) The only substantial prospect of rdief was that afforded by the
better harvests. The Food Council's progranune as presented,
however, asks for an increased importation of 4} million tons.
The Mimitions Council have not completed their progranune,
but they have sent a, warning that chaiige in the character of
warfare must mean &n increased importation per capita.
(4) Reference has already been made to the increased American military
programme, which is recognised by all the nations as a vital need
to bring about an early victory. The American Grovemment has
estimated that in addition to the ships of the European Allies now
transporting troops it will require for the supply programme of
these increased military forces (in addition to the vessels of the
American Government, including their new building) a further
amount of tonnage, starting with about 1,200,000 tons deadwei^t
and reducing gradually to about 200,000 tons deadweight in Feb-
ruary next. Wliile the detailed demands upon tonnage have not jt^
been presented to the Allied Maritime Transport Council, it will
be recognised at once by all that this vital new factor will necessi*
tate a most careful review, of the progranunes of all of the asso*
ciated Grovemments and a closer co-ordination of all tonnage
resources.
(5) Some savings, difficult to calculate exactly, are doubtless to be
allowed for improved convoy arrangements, reduced losses, and
the shipment of a larger proportion of imports from the nearest
source (the North Atlantic), and it may be hoped that the abnormal
winter of last year will not be again repeated.
On the other hand, the railage, loading and shipment of over
one million tons a month of Army supplies in Noith America,
which were not coming last year, and the risk of serious shortage
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ENEMY SHIPS AND FOOD 888
of coal, both in America and in the United Kingdom, may cause
delajrs to shipping.
(6) No indication has been received of any substantial change in the
demands on shipping in respect of Naval needs or of Military
demands of the Secondary Ebcpeditions, except that a demand,
the final extent of which cannot yet be estimated, is now being
again made for tonnage for Russia.
(7) It is clear, from the general notes above, that the need for compres-
sion of programmes must be extremely drastic The process will
take time, and action taken at present must be provisionaL It is
suggested, however, that the principle given to the Food Council
(viz., that actual recorded consumption during the last year should
be taken as setting the maximum limit to programmes, with
aUowance for home productions) should be applied at least to
conunodities required for civilian consumption. It is clear that
compression beyond this point will, in fact, be necessary unless
the military effort is to be impaired, the general formula being
that each 5,000 tons of imports saved will enable about 1,000
additional American soldiers to be maintained in, and, therefore,
sent to France.
26th August, 1918.
DOCUMENT No. 11
PROPOSED PROVISION IN ARMISTICE OF NOVEMBER 11th, 1918,
AS TO ENEMY SfflPS AND FOOD
Resolution adopted by^ Permanent Representatives of the AUied Maritime
Transport Cou/ncil and of the Inier- Allied Food Council at Lancaster
House, October 28th, 1918.
The permanent representatives of the Allied Maritime Transport
Council and the Food Council have had under consideration the possible
effect on the vital supply arrangements of the Allies of the conclusion of
an armistice, pending the conclusion of peace. In this connection they
had before them the prospect that additional supplies will in any event be
required for neutral countries and for the liberated populations, and the
possibility that those in charge of the armistice and peace negotiations
will contemplate also that certain supplies hitherto excluded from Germany
through the blockade, will during the period now in question be permitted
to go through the blockade as one of the conditions or results of the
anmstice.
The representatives in question unanimously agreed that even if only
the first class of supplies, {. e., those to neutral countries and the liberated
populations, are under consideration, it is essential that any supplies so
arranged should be made through the existing allied organisation of the
Food Council and Programme Committees, &c., who would within the
Y2
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824 ENEMY SfflPS AND FOOD
Kmits of the authority aUowed them determine both the quantities, sources,
terms, and conditions under which the supplies would be furnished and
imported ; and to make this control effective they consider it ess^itial
that all German and Austrian merchant vessels should be placed under the
direction of the Allied Maritime Transport Council. It would in their view
be disastrous if either neutral or enemy countries were able to go into the
markets of the world and purchase supplies required for the vital needs of
the Allies in competition, but without co-operation, with the Allies, the
result of such action being necessarily the entire dislocation of the general
economic position now prevailing with disastrous results to the civilian
populations of both allied and neutral countries. To avoid this result it
appears essential first that the large block of enemy tonnage now idle in
enemy or neutral ports should be brought into use, and, secondly, that it
should be used under Allied direction and in accordance with a genial
Allied plan.
The ultimate disposition of the enemy merchant marine so placed under
the direction of the Allied Maritime Transport Council could then await
the final peace conference.
These recommendations have been made unanimously by the p^tna-
nent representatives of the Food and Transport Councils. The same
considerations would appear to apply to raw materials and other coat-
modities generally, and so far as we have been able to consult those
representing those commodities, they are in full accord with the above
recommendations.
Beoommendation.
It is therefore recommended that the merchant marine of the Central
Powers should be placed under the direction of the Allied Maritime
Transport Council, and that such supplies of food or other commodities
as may be allowed to the Central Powers should be obtained through the
instrumentality of the existing Allied organisations, and under such terms
and conditions as those organisations may be required to impose.
DOCUMENT No. 12
UNITY OF CONTROL
The Principle applied to Allied Supplies,
Draft of Statement prepared far publication but not issued in view of
Conclusion of Armistice.
The Allied Maritime Transport Council make the following announce-
ment : —
The Council, which was established by the Allied Conference at Paris
in December last, and is now working through a permanent organisatiiHi
at Lancaster House and a series of Committees in ^diich Allied repte-
sentatives of all the main Supply Departments in each country are co-
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UNITY OF CONTROL 825
operating, stands for the application of the principle of Allied control
to Allied supplies.
The strength of the forces the Allies can command in France depends
upon the amount of supplies which can be transported to maintain them,
and any failure to organise the transport and supply system to its maximum
efiSciency might easily mean postponing victory by a year.
It is essential, therefore, that the resources of the Allies shall be used
to their utmost ; and for this that they shall be used under a central plan
and under unified control.
The Allies have agreed that the allocation of ships, upon which depend
all their imported supplies both for Military and Civilian purposes, shall
be arranged upon the simple and equitable principle of securing that they
help most effectively in the prosecution of the war and distribute as evenly
as possible among the associated countries the strain and sacrifice whidi
the war entails.
The available supplies of food for the Allies are limited, the output of
munitions is limited, the manufacture bf every form of supplies and
provisions required for both combatants on land or at sea is limited. If
any service has more than it can fairly demand as its share of the common
resources, if any country has more than it can fairly demand, there is a
net reduction in the forces directed against the enemy and an unfair
distribution of the sacrifices entailed by the war. This is a problem which
no single country can solve by itself. France from the first moment of
the war had to divert so many men to her army as to make the need for
assistance from her Allies for supplies and shipping essential. Italy, too,
has engaged in military operations beyond the power of her production
and her industrial sources. Great Britain and America are bound to
provide both ships and supplies. To America the Allies are bound to
look for the main portion of their food supplies, for financial help, and
later, as her shipbuilding increases, to tonnage assistance too. Great
Britain, for the time being, bears the main burden of supplying her Allies'
deficiencies in tonnage.
The essential basis of any such organisation must be the control of
shipping, for shipping is the limiting factor in all allied supplies. Through-
out the last two years of the war more supplies have been produced than
ships could transport. The amount of supplies therefore depends upon
the ships to carry them, and the amount which each ally can obtain
depends upon the allocation of tonnage to that ally. It has become necessary
therefore that the authorities who control the different mercantile marines
which serve the Allies should be so associated as to direct their vessels
under a common plan, and should have at hand an Allied organisation com-
petent to advise them as to the relative importance of all Allied requirements.
Much has already been done. A year ago, although the tonnage at the
disposal of the Allies was considerably greater than it is now, the European
Allies were in grave doubt and uncertainty till right up to the harvest as
to whether they would reach the harvest without serious shortage of food.
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826 UNITY OF CONTROL
This year, in spite of shipping losses, eaeh of the Allies knew by the exki
of the spring that it was assured of an adequate food supply to the harvest
and well beyond. Not only that, but each Ally is satisfied that in its most
important food supply — ^bread — ^the resources open to the Allies as a
whole have been fairly distributed between them.
The principle successfully vindicated in the case of bread and all
cereals is now being applied to the whole range of imported commodities
required by the Allies, each of which is being examined by Allied experts.
A Munitions Council is examining the requirements for munitions of
America, France, Italy, and Great Britain, and is attempting to see that,
in relation to the military strength and conunitments of the four countries,
the arrangements for production, for supply and for transport are adequate
and fairiy distributed. Similar committees under an AUied Food Council
are dealing with every class of imported food and with every class of
article required as raw materials for industries. When the programmes
have been so produced by agreement between these different Allied
experts, they will be considered in relation to the total carrying power of
the available tonnage under Allied control, and so far as the tonnage
sufKces, it is intended that arrangements shall be made between the
different Ck>vemments to allocate tonnage accordingly. In order that the
more important questions of policy as to the direction in which reduction
should be made if the total programmes exceed the carrying power of the
total ships, the whole of the above machinery of Allied Conunittees is
linked up to a Council of AUied Ministers (the Allied Maritime Transport
Council). This Council consists of two Ministers from each of the European
(Sovernments and two delegates from America. Its current executive and
administrative work is carried out by a permanent organisation, the Allied
Maritime Transport Executive, consisting of expert staffs supplied by the
four (Tovemments and working together in one office.
It is the definite duty of this Council and this Executive to make a
plan which will, by arrangement with the different (Tovemments, secure
that the whole of the imported supplies of the different Allies are fairiy
allotted so as to aid most effectively the successful prosecution of the war,
and to share the burden of sacrifice as equally as possible between the
different countries. These principles were expUcitly and unanimou^
accepted by all the Allies at the great Paris Conference of December last
The organisation is now at work, the investigations are being made, and
the purpose can be achieved. One thing, however, is necessary to success.
The ci\ilian populations must be prepared to accept sacrifices which fall
in one direction or another as a part of the general plan.
It is essential that the public in the four countries should realise wbai
the shipping position is and how much depends upon a rigid economy in
every direction if we are to end the war quickly and victoriously.
The Allied Maritime Transport Council propose for this purpose to
issue from titae to time a general statement of the Allied shipping position
(see p. 210).
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POST-AKMISnCE POLICY 829
DOCUMENT No. 14
POST-ARMISTICE POLICY
[This was approved by the British War Cabinet on November 18th, 1918,]
Alter HostiUties.
Among a large nmnber of questions which may call for Inter- Allied
discussion, the following are those which appear to be most urgent : —
(a) The nature and the amount of the assistance to be given by the
Allies for the reconstruction of devastated territories.
(h) Exchanges and other reciprocal concessions between the AUies in
respect of foodstuffs and other essential commodities.
(o) Arrangements, similar to those which already exist, from concerted
or joint action in acquiring commodities, necessary for use and
consumption in AUied countries, which could not otherwise be
obtained in sufficient quantities.
The Maritime Transport Council might become a (general Economic
Coimcil for the discussion of these and similar questions. Considerations
of finance and economics would be involved, and it might be advisable
to modify the composition of the Council accordingly. If the Council
were expected to draft concrete proposals for submission to the Allied
€k>vemments, the assistance of financial and economic experts (such as
could be supplied by the Treasury and Board of Trade) would no doubt
be required.
In all that concerned foodstuffs, raw materials, and other essential com-
modities, the Greneral Economic Council could advantageously make use of
the programme committees. These could be advantageously combined
in two groups under (a) the existing Food Coimcil, and (b) a Raw Materials
Council. The British experts on the Raw Materials Council should include
representatives of the Board of Trade, War Office (Supply Department),
and Ministry of Munitions (Raw Materials Department).
Decisions.
1. Revise representation on Maritime Transport Council to make it a
General Economic Council.
2, Bring the programme committees which deal with raw materials
under a Raw Materials Council, on which the Board of Trade, War Office
(Supply Department), and Ministry of Munitions (Raw Materials Depart-
ment) should be represented.
COMMUNICATION MADE TO PERMANENT REPRESENTATIVES
OF FRANCE, ITALY, AND UNITED STATES ON THE
ALLIED MARITIME TRANSPORT EXECUTIVE
The British Government has decided to suggest to the (Tovemments
of the United States, France, and Italy that it is desirable to revise the
representation and functions of the Allied Maritime Transport Council
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880 WORLD TONNAGE POSITION AT
so as to make it a General Economic Council, which would co-ordinate the
work of the various Councils, and, through them, of the Programme
Committees. It is also suggested that the various Raw Materials Pro-
gramme Committees, together with those now grouped, and the Munitions
Council, should be grouped under an Inter- Allied Raw Materials Council
just as the food programme committees are grouped under the Inter- Allied
Food Council.
Xath November 19X8.
DOCUMENT No. 15
WORLD TONNAGE POSITION AT CESSATION OF HOSTILITIES
19th December 1918.
1. The general position may be summed up in a sentence by saying
that, while there will remain a serious shortage of passenger tonnage
through the period during which troops are being repatriated, the shortage
of cargo tonnage ceased to be serious as soon as hostilities were concluded,
and so far as can be seen will shortly disappear altogether.
It is proposed in this memorandum to deal only with cargo tonnage.
2. The following are the credit factors in the situation :
(a) Enemy Tonnage. — ^The amount of tonnage which will ultimately
be brought into use is between 4 and 5 million tons deadweight. This
can scarcely be counted upon in any considerable quantity for several
months however, and the full amount is unUkely to be in service till
the sununer of 1919. Provisionally it may be regarded as off-set against
enemy demands and as leaving no surplus over this demand.
(b) Interned Allied and Neutral tonnage from Black Sea, Baltic Sea,
Ac. — ^This will ultimately amount to 400,000 tons. We may perhaps
hope that the average amount employed during the next six months
will amount to 200,000 tons deadweight.
(c) Neutral tonnage demobilised elsewhere (Dutch East Indies, &c.) —
Amoimt ultimately available 800,000 tons. Average amount available
during next six months perhaps 150,000 tons.
{d) The monthly world output now exceeds losses by about ^ million
tons a month. This should give an average of nearly 1^ million tons
extra tonnage for the next six months.
(e) The cessation of war damage should mean that a large amoimt
of extra tonnage should be available from the repair yards. Against
this, however, must be set the necessity for undertaking postponed
repairs put off till the last moment during the war.
(/) The stoppage of transportation of troops from America to Europe
at the expense of cargo shotdd give something like | million tons extra
deadweight for cargo work.
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CESSATION OF HOSTILITIES 331
(g) The stopp€ige of the shipment of munitions should give at least
i million tons extra tonnage, or, including American Army supplies,
I million tons.
(h) The tonnage released from British, French and Italian Military
and Naval Service should give an average of about J million tons extra
deadweight during the next six months.
(») The improved turn-rounds of vessels, with the abolition of convoy
and other anti-submarine protective arrangements, should give an
increased carrying capacity equivalent to something like 2 million tons
deadweight.
8. As against this there are the following debit factors :
(a) The new demands firom enemy, and possibly also from liberated
areas, may be set against the use of the enemy tonnage and regarded
as cancelled out.
(b) The re-distribution of British liners on their normal peace routes
may be taken as involving a reduction of cargo carrying capacity
equivalent to the loss of, say, 500,000 tons deadweight.
(c) The return of the American ships to their earlier work may
involve another J million tons deadweight, and a similar movement of
Allied tonnage and tonnage in Allied services may be taken as equivalent
to the loss of, say, another ^ million tons deadweight.
4. The British reconstruction demands for the next six months amount
to a little under ^ million tons a month of cargo more than the programmes
which we were working on in war conditions. This may be taken as the
equivalent of 1^ million tons deadweight.
We have no similar revised programmes for the Allies, but if we take
a similar figure of 1^ million tons we should probably be fairly covered.
5. The general conclusion would appear to be that, after allowing for
return of vessels to pre-war routes and for increased reconstruction demands
the Allies should have ample tonnage to meet their importing needs, and
there should be a considerable margin available for release for general
world traffic.
6. The general conclusion may be confirmed by reference to the building
and losses position throughout the war.
7. Great' Britain has lost net during the war 8,448,000 tons gross or
say 5 million tons d.w. The world as a whole has lost net during the war
1,800,000 gross tons or 2^ million tons d.w.
8. Great Britain is building in excess of losses say 180,000 gross tons
a month or say 200,000 tons d.w. The world is building in excess of losses
at over } million tons d.w. a month.
9. It may be anticipated that apart from the acquisition of any enemy
ships, British tonnage would reach a pre-war level towards the latter part
of 1920.
10. World tonnage, however, would reach its pre-war level by the
sununer of 1919.
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382 TONNAGE AGREEMENT WITH FRANCE
11. It must be remembered that while world tomiage is for the moment
2^ million tons less than it was before the war, it is probably a great
mistake to think that the world demand will jump rapidly back to peace
standards and apart from any shortage of ships it is unlikely that peace
standards, of consumption and peace methods of supply would be inune^
diately resumed, for during 4 years of war every country has under the
pressure of the shortage of shipping learned to dispense with many foreign
imports and to produce home substitutes. The process will doubtless be
gradually reversed but it is likely to be a very long time before the result
of increased home production and reliance upon home products disappear.
The process is likely to be further retarded by the general financial exhaus-
tion which may prevent enterprise being at once resumed on the pre-war
scale.
J* A. S.
DOCUMENT No. 16
(A) TERMS OF TONNAGE AGREEMENT CONCLUDED
WITH FRANCE ON 22nd JANUARY 1919
1. Great Britain is prepared to supply for French service (either by
Charter to French Government, or to French firms, or by emplojdng in or
directing into the French importing trade) sufficient British tonnage to
keep the total amount of tonn€ige (National, Allied and Neutral) in the
French import service up to the total amount engaged in that service on
81st October 1918 (being the end of the last month before the cessation
of hostilities). The rate not to exceed 25s. per ton d.w. for ordinary
ocean-going tramps of 2,500 tons d.w. and upwards, or freight rates on an
equivalent basis ; while the maximum rate for smaUer vessels will be in
accordance with the British limitation rates. The French Government wiU
accept full financial responsibility for these arrangements.
2. The French Government will realise that it would prove impracti-
cable to maintain the limitations of charter rates for British owners if the
French Government or private French charterers charter on voyage or
time any National, Allied or Neutral tonnage at higher rates.
8. While there is no obligation whatever on the French Government
to take British vessels at the above rate or at any rate which is above the
market rate of the time, there will be a general understanding that the
French Government will (unless the British Government otherwise desire)
charter British vessels at either the 25s. or any lower rate in preference to
neutral vessels.
4. The French (Jovemment will accept financial responsibility for the
remainder of any charters of neutral and Greek vessels which were in
French service on 81st October, 1918, including neutral tonnage then on
that service on allocation by the Wheat Executive, and for the same
proportion of any neutral vessels unallotted at the date as the proportion
of such vessels which have on the average been allotted to Prance.
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TONNAGE AGREEMENT WITH FRANCE 833
5. The conditions effecting rates on Liner Shipments are too compli-
cated to enable a specific agreement as to rate to be entered into. The
general French position as to cost is, however, sufficiently safeguarded by
the arrangement made above for tramp tonnage.
6. With regard to the request that freight rates shall be such as to
enable materials to be in the hands of manufacturers at the same basic
price, the British Gk>vemment made the following declaration : —
7. Freight is not being supplied below the market to private merchants
or to conunodities imported under commercial conditions at lower rates
than those specified in paragraph 1, importation at the lower Blue Book
rates being reserved for commodities imported on Government account.
The only kind of case in which prevailing conditions (coupled with the
arrangement in this agreement) may not meet the principle proposed in
the French request is the case in which a commodity is imported for a
Government department and is then in part delivered by that department
to a private manufactiurer. This special case (affecting as it does the
administrative arrangements of Supply Departments) cannot be disposed
of under a purely shipping agreement. It must be left to be dealt with as
a part of the wider proposal made with regard to the exercise of control
of materials by M. C16mentel and given to Lord Reading for submission
to the British Government.
As soon as market rates fall below the controlled freight rate the object
desired by the French Government will, as far as freight is concerned, be
secured automatically.
8. This Agreement is (subject to renewal) to terminate on the 1st July
1919.
(B) LETTER ADDRESSED TO FRENCH REPRESENTATIVE
ON ALLIED MARITIME TRANSPORT EXECUTIVE AS
TO ANGLO-FRENCH TONNAGE AGREEMENT OF 22nd
JANUARY 1919
{A similar agreement was svisequenUy made between Great Britain and
Italyy see p. 228.)
80th January 1919.
I am writing as British Representative on the Allied Maritime Transport
Executive with regard to the present position of the British Government
in relation to the allocation of British tonnage to France and Italy.
The British Government is, as you know, arranging to release vessels
from requisition in all possible cases as they complete their voyages in the
United Kingdom (or, in special cases, at ports abroad) on or after March 1st
next (or, in the case of liners, February 15th). It is understood that the
American Government hasconunenced the release of American tonnage
and that the French Government propose to release French tonnage in
February.
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9U TONNAGE AGREEMENT WITH FRANCE
In view of the prospect of the release of tonnage from requisition
informal indications were given by the British to the French Govemm^it
in December that the continuance of the principle of allotting tonnage in
accordance with different Allied supply programmes would be both
unnecessary and impracticable. The extreme shortage of tonnage, and
the inevitable inter-dependence of the Allied requirements under war
conditions rendered such a system necessary while hostilities continued.
That system, however, necessarily imposed a joint responsibility upon
all the Associated Governments both for the programmes of each country
and the employment of each merchant fleet ; and it was clearly desirable
that the consequent limitation of the freedom of action of each National
Government should be removed as soon as the new conditions allowed.
At the same time the British Government recognised the reasonable-
ness of the request of the French Gk>vemment that in the transition firom
one system to another they should be safeguarded against any risk of
increases in the rates of freight.
The British Government therefore indicated, on December 28rd, that
they would be prepared (in exchange for the former responsibility accepted
by them under the agreement of 8rd November 1917 as interpreted in the
arrangements made under the Allied Maritime Transport Council in 1918)
to guarantee to the French Government that within a specified maximum
limit a total tonnage for their importing services should be assured at a
specified maximum rate. The details are shown in the enclosed copy of
the Agreement, the terms of which were proposed by Sir Joseph Maday
on behalf of the British Government on December 28rd, 1918, and accepted
by M. Cl£mentel on behalf of the French Government on January 82nd»
1919. The American and Italian Governments were informed of the
Agreement proposed between Great Britain and France with an indication
that Great Britain was prepared to enter into an Agreement upon a similar
basis with Italy, if she desired.
The new Agreement has been accepted by M. Cl^entel as cancelling
the Agreement of 8rd November. Its main principle is that France being
assured of sufficient total tonnage for her importing services, will take
such action as she desires on her own responsibility to secure that adequate
tonnage is available for each particular service.
I am, therefore, to give notice formally that Great Britain regards
other obligations to supply tonnage, or to supply tonnage at specified rates,
whether under the 8rd November Agreement or other arrangements, as
now terminated. Vessels will not therefore be directed under the pro-
gramme S3rstem for cereals, or food generally, or raw materials, or French
naval or civilian coal ; and it wiU be necessary for the respective Frendi
Departments to charter such tonnage as they require for these services.
Any vessels which may, in fact, be allocated for particular services
during the process of transition from one system to the other will be
counted towards the total of tonnage for all purposes which France may
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TONNAGE AGREEMENT WITH FRANCE 386
daim under the Agreement, and not regarded as fulfilling any responsi-
bility for the execution of a specific progranune.
I am to suggest that you should transmit the necessary information
to the various French Departments concerned (including those responsible
for food, raw materials, and both naval and civilian coal), with a view to
their being prepared to charter such tonnage as they may require.
In this connection I am to refer particulariy to the case of coal.
Requisitioned tonnage has been supplied for the conveyance of coal to
France for the following services : —
(a) French State Railway.
(b) Nord & Est Railways.
(c) B.N.C. replacement coal.
(d) French marine requirements over and above what can be carried
in French national and time-chartered ships.
(e) Swiss munitions requirements.
(/) A further communication will be made as to the Bruay Mines
replacement in respect of coal drawn by the British Army from
Bruay Mines.
For all these services, except (c), freights based on requisition rates
have been charged to the French. As regards (c), the French have been
charged the limitation rates. In future it wiU be necessary for the French
to charter for all these requirements at the market rates.
Messrs. Wm. Mathwin and Son, who have been stemming vessels for
all these requirements, are being informed that, as from the 1st March,
they wiU not be concerned in any shipments under any of the above heads.
DOCUMENT No. 17
This document consists of a summary of the decisions and
resolutions of the Allied Maritime Transport Council during the
six sessions :
(1) March 11-14, 1918, at London.
(2) April 23-25, 1918, at Paris.
(3) August 29-30, 1918, at London.
(4) September 30, October 1-2, 1918, at London.
(6) February 1-12, 1919, at Paris.
(6) March 10, 1919, at Paris.
FIRST SESSION AT LONDON. MARCH 11-14, 1918
Summary of Dedsums.
The Council decided that the following programme should be put into
effect: —
(a) France undertakes to supply 850,000 tons of French coal to Italy in
the month from the 15th March to the 15th April.
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a86 DECISIONS AND RESOLUTIONS OF THE
{b) The Allies to ship 850,000 tons of British coal to France (mainly
Dunkirk and Rouen) in vessels not at the time in the French
coal trade, and as nearly as possible within six weeks of the
15th March*
(c) The French coal supply to be of a quality equal to that of the
British coal, an adjustment, whether by way of an increase in
the quantity of Fr^ch coal supplied or a reduction in the com-
pensating coal, to be made to the extent to which it proved
inferior.
{d) So far as possible the compensating coal so to be supplied to
France to be shipped in small vessels or other vessels not in the
Atlantic import service, and Great Britain to endeavour to
ship 150,000 tons in tonnage of this kind. The remainder to be
supplied by the diversion of large vessels before proceeding
across the Atlantic, vessels being chosen from among those in
the service of the different Allies.
(e) The above arrangement was conditional upon Dutch tonnage in
American ports being quickly available to compensate for the
loss of Atlantic imports through diversion, and a recommenda-
ti<m to be made to the Supreme War Council that half the Dutch
tonnage in those ports should be allotted to meet such impcnta.
(/) The permanent organisation of the Council to work out a co-opera*
tive Allied plan for the supply of the necessary tonnage for the
shipment of the other coal to Italy, viz., from the United Kingdom
to Italy, United Kingdom to Blaye, and from South France to
Italy, the arrangements as regards the first two routes bdng as
before the primary responsibility of Great Britain and Italy, but
the other Allies co-operating particularly in regard to the third
route.
(g) A committee to be composed of representatives of the Italian
Government, of the French Ministry of Public Works and the
French Ministry of Munitions to be appointed and be resp<msible
for watching at Paris the actual expedition of coal to Itoly day
by day, and to keep the Secretary of the Council informed of the
quantities actually despatched.
(A) A meeting of officials representing the four countries to be held in
London before the 8rd April next, to prepare a programme for
the supply of coal after the 15th April.
(i) A communication to be made to the Swiss Government as to the
use of the Simplon route.
SECOND SESSION. APRIL 28-25, 1918
See Part IV, Chapter V, Page 165.
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ALUED MARITIME TRANSPORT COUNaL 837
THIRD SESSION. AUGUST 29-80, 1918
Food Programme for the Cereal Year 1918-19.--^' The Programme of
' importations to be commenced on the purely provisional basis of the
' quantities covered by the priority figures [18-6 million tons excluding
' military oats], it being fiilly understood that the figures will be recon-
' sidered as soon as full infoimation is available. As far as military oats
*' are concerned the old progranune of importation must continue until the
* matter has been further considered.'
The Council decided to recommend the allocation of tonnage in
accordance with this decision, and with the proportions as between the
different Allies as recomimended by the Food Council, subject to the
conditions stated in the memorandum.
Importation of Civilian Commodities. — ^Having regard to the general
tonnage position, the Coimcil resolved that * With regard to the programmes
* of civilian commodities generally, imtil further order, actual recorded
*' consumption of the past year should be taken as setting the maximum
* limit for programmes of importation for the next year. This principle
* is not to be understood as preventing a different distribution as between
* the different Allies or a greater importation than last year where a
* country has used up stocks and must have a larger importation to avoid
*' a reduction of consumption. This principle is to be communicated to
^ Programme Committees in order to set the maximum limit to the
* programmes they prepare for the Council.'
Tonnage for Swiss Needs. — ^The Council resolved (1) that the Allied
Governments should accept the responsibility for what the Council
agreed to be Switzerland's minimum requirements ; (2) that the assump-
tion of this responsibility should be in conjunction with a satisfactory
arrangement as to other negotiations the Allies may desire to conclude
with Switzerland ; (8) the foregoing resolutions should be commimicated
to the Allied Governments with the recommendation that they shall take
immediate steps to carry Resolution 2 into effect ; and (4) that the proposal
that the German Government should share the responsibility for the
provision of tonnage (from vessels interned in Spanish or Dutch ports^
which the Swiss Government believed the Crcrmans were prepared to do-
should not be encouraged.
FOURTH SESSION HELD AT LANCASTER HOUSE, LONDON,
S.W. 1, SEPTEMBER 80th, OCTOBER 1st AND 2nd, 1918
(a) That America should, with the European Allies, table her pro-
granunes of imports for joint consideration by the Allied Programme
Committees, and her tonnage for similar joint consideration by the Allied
Maritime l^nsport Council, and enable her representatives on these
bodies to consider adjustments in the programmes of her imports and the
allocation of her tonnage.
1569.83 2
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338 DECISIONS AND RESOLUTIONS OF THE
(b) That, in order (1) to secure in the immediate future additional
tonnage for the American Army Supply Service, and (2) later to meet
the accumulated European deficit and to supply commodities vitally
needed by any one of the four countries, America, like the European
Allies, should be guided in the arrangement of her import services and the
disposition of her tonnage by the information and recommendations of
the Programme Committees and the Transport Coimcil, with the definite
intention of utilising this Allied machinery in order to achieve the objects
unanimously agreed on by the Paris Conference, viz. : —
(i) to make the most economical use of tonnage imder the control of
all the Allies,
(ii) to allot that tonnage as between the different needs of the Allies
in such a way as to add most to the general war effort, and
^(iii) to adjust the programmes of requirements of the different Allies
in such a way as to bring them within the scope of the possible
carrying power of the tonnage available.
Munitions in Winter : Food afterwards.
(e) That, during the later Autumn and Winter, a general preference
shall be given to the transport of munitions and army supplies as com-
pared with food.
{d) That, when necessary, but as late as possible without running
undue risk of actual shortage of food, a similar preference shall be given
to the transport of food in the spring or early summer.
(e) Reduction of Stocks. — ^That, in view of the prospect of substantial
improvement in the whole Allied tonnage position by next summer, and
in order to avoid reducing the shipment of essential commodities required
for actual consumption during the year up to August (particularly muni-
tions), all Supply, Departments should be asked to effect a reduction of
stocks until they approximate towards the end of August to the quantities
required for actual distribution.
(/) Food. — That 18-5 million tons of importations of all articles included
in the food programme, except military oats, should be confirmed as the
figure for the year.
{g) That if the food position at the end of the winter or later shows
such a course to be necessary in order to avoid food shortage, food ship-
ments shall have priority in excess of the proportion due on the 18*5 basis
at the expense of tonnage allotted to other services.
(h) That for the purpose of cpnsidering the tonnage available for other
services the total importations of food (and all other articles included
in the food programme), including all misceUaneous foodstuffs and military
oats, should be provisionally estimated at 22 million tons.
(i) MuniUons. — ^That in estimating what is available for the European
munitions imports it should be provisionally assumed that any tonnage
assistance rendered to America, whether by the allocation of ships or the
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ALLIED MARITDIE TRANSPORT COUNCIL 339
supply of artillery, will be returned within the cereal year, thus leaving
18 million tons for European munitions, including ore, pyrites, phosphate
rock, railway material, and lubricating oil, but that it should be recognised
that this requires - reconsideration after examination of the munitions
progranune, and in particular of the arrangements there proposed for
supplies to the American forces.
ij) Raw Materials. — ^That the principle provisionally approved at the
last Session for raw materials, viz., that actual recorded consumption of
last year should be taken as setting the maximum limit for progranune
for the ensuing year, should continue to be applied.
Supply Programme for the American Army.
(k) That the Council should not recommend at this moment any
reduction in the embarkation of American soldiers in spite of the grave
condition of the European import programmes, but should be prepared
to recommend such a reduction, if necessary, in the embarkations of next
year in order to meet any crisis that may arise in the imports of food or
other supplies at the time.
(l) That the Coimcil, having before it the following provisional alloca-
tions of tonnage for arrival firom September to December inclusive, viz..
Food, including military oats, 7 million tons,
Munitions and raw materials, 9 million tons,
recommends that approximately 500,000 tons be diverted from the above
allocation for the American Army programme for October, November,
and December, including the 200,000 tons already arranged, but in
addition to any further space that can be provided by the release of
double bottoms.
(m) Coal. — ^That the strongest recommendations should be made to
the British Government as to the immense importance to the entire
Allied supply position of increasing the production of coal.
(n) Publicity. — ^The Council recorded their opinion that in view of the
severe sacrifices that must in any event be entailed if the American military
progranune is continued, a full statement of the position should be issued
to the public of the four countries, this statement emphasising the fact
that it is the supreme importance of increasing the Allied forces in France
which is the reason for the sacrifices asked for, and that these sacrifices
are likely to be required only during the winter and spring, the supply
position being thereafter in all probability greatly improved.
z 2
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S40 DEaSIONS AND RESOLUTIONS OF THE
FIFTH SESSION HELD AT PARIS 1-12th FEBRUARY 1919.
Recommendations to Supreme War Council.
1.^ In arranging for the allocation for management of enemy tonnage,
the Allied Maritime Transport Comieil have done so on the miderstanding
that the ultimate disposition of the vessels by the terms of peace shall
be in no way prejudiced, and that in order to mark the fact that the
vessels are being administered in the meantime in trust for the Associated
Governments as a whole, they wUl fly at the poop (or in the case ot vessels
manned by Naval officers and crew at the fore) the flag of the Allied
Maritime Transport Council, as well as the national flag of the country
undertaking the management. The Coimcil recommend that each of the
Associated Governments should make a definite declaration in the above
sense, including a statement that in discussing the question of the ultimate
disposition of the vessels they will not found any argument on the alloca-
tion for management or service of the vessels in the meantime.
2.^ The Council desire to point out to the Supreme War Council that
no Allied Council is at present vested with sufficient authority to deal
with all enemy shipping questions or with the provision of tonnage, whether
Allied or enemy, for relief purposes. The Agreement concluded'with the
German Government on January 17th, 1919, included a provision to the
effect that the Associated Government would arrange for the adminis-
tration of the German vessels handed over either through the Allied
Maritime Transport Council or through some other body which they would
create or designate for the purpose. No such appointment has yet been
made. The Council are prepared to accept the responsibility if the
Supreme War Council desire them to undertake it, but they would desire in
that case that a definite and explicit decision of the Supreme War Council
should invest them with the necessary authority. Apart from the German
ships, no central Allied body is entrusted with the settlement of the
numerous questions arising in regard to the acquisition, allocation, and
use of Austrian vessels. The allocation has, in fact, been made in many
cases through Naval Commissions in the Adriatic, in Spain and elsewhere,
but in cases where agreement through these local Commissions has not
been arrived at there has been no central body to settle the points in
^ Note. — In oonneotion with Resolutions 1 and 2, it was undeistood that the term
* Enemy Tonnage * throughout these Resolutions means ' Enemy Tonnage acquired and to
be acquired since the signing of the Armistice of 11th November, 1918 *. It was also under-
stood that the responaibilij^ which the Allied Maritime Transport Council contemplated
undertaking under Resolution No. 2 was a responsibility for the allocation or re-allocation
of enemy tonnage for management by one or other of the Associated Gbvemments and for
its use and also a responsibility for financial arrangements in connection with the acquisition
and use of the vessels.
It was also understood in connection with Resolution 2 that in assenting to the reeponsi-
biHty there defined, the Shipping Ministers of the several countries did not commit themselvee
to the view that it would necessarily be desirable to use the power of requisition to provide
tonnage for relief purposes.
Spbcial Notx. — Resolutions 1 and 2 were submitted on February. 4th to the Supreme
War Council for approval.
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ALLIED MARITIME TRANSPORT COUNCIL S4I
dispute. The Council have, in fact, been arranging the employment of
such vessels as have been brought into service, but again they have had
no specific authority from the several Governments. The Council suggest
that the Supreme War Council may find it convenient to appoint the
Allied Maritime Transport Council as a central authority for deeding with
enemy shipping questions generally, including authority to direct the
allocation or re-allocation for management or iise.
Appointment of and Instructions to Shipping Representative for
Conference with German Representatives at Spa.
8. The Council appoint the following shipping representatives for the
meeting with the Gkrman representatives at Spa : —
Prance - - M. Laur«it Vibert.
Italy - - . Signor Brizzolezzi.
America - - The Hon. G. Rublee, accompanied by Mr. Robinson.
Great Britain - Mr. J. A. Salter, accompanied by Mr. T. Lodge.
4. The Shipping representatives are authorised to arrange with the
German representatives that for the time being (and subject to the right
of the Associated Governments to demand that some of the vessels now
provisionally excepted shall be handed over at a later date), the following
classes of vessels shall not be handed over, vis., (a) sailing vessels ; (b)
vessels under sixteen hundred tons gross, which do not possess passenger
acconunodation. It is also understood that fishing vessels are excepted
under the original agreement as not being included within the expression
^ German Merchant Fleet.'
5. The representatives are also authorised to arrange with the German
representatives that the appropriate remuneration to be fixed by the
Associated Governments under the terms of the Armistiee shall be on the
following basis : — ^The German (Jovemment will be credited for the use
of each ship with the rate of hire which is being paid for that class of
ship by whichever of the Associated Governments is at the time obtaining
that class of ship on the cheapest terms.
It is to be clearly understood that the money so earned will not be
paid to the (merman shipowners, but wUl be credited to the German Govern-
ment, and it will be for the financial authorities of the Associated Govern-
ments to determine the precise manner in which it shall be so credited.
Priority in use of Enemy Tonnage.
6. Enemy cargo tonnage under the control of the Council is to be used
in priority for the rdief of liberated territories and enemy countries.
So far, however, as any of the Associated Governments supply national
tonnage for the above purpose, they shall have the right to call upon the
use of enemy tonnage to an equivalent extent.
7. The Council decide (with a reservation as to military transport
which may be demanded of the Allied Maritime Transport Council in the
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842 DECISIONS AND RESOLUTIONS OF THE
common interest of the Allies by the Supreme War Council, or in its name
by the Higher Conunand of the Allies), that until the Council, or the
Executive during intervals between meetings of the Council, otherwise
determine, enemy passenger tonnage shall be used exclusively for repatria*
tion of troops, prisoners and refugees.
AUocoHon for Management^ and use of Enemy TonnagCy with
other arrangements.
8. The first batch of 58 vessels named by the German Government as
ready for immediate service (which, on present information, appear to be
all or nearly all cargo vessels) shall be allocated on the following principle :
without prejudice to the total amoimt of cargo tonnage to be idlotted to
the several Governments, the Council decide that half of the cargo vessels
in the list in question are to be allotted to the British Gk>vemment and
half to the French Government for management.
9. The Council impress upon each of the Associated Governments the
extreme importance of measures being taken to secure that the orders of
the CoimcU as to the allocation of vessels shall be duly carried out.
10. The Council decide that subject to the arrangements made for
allocation and use of enemy ships by the Coimcil or the Executive, and
subject to any progranmies for allocation or employment so made,
Mr. J. A. Salter shall be authorised in cases of urgency to give orders as to
the use of individual ships.
11. The Council decide that in order to make certain that the use of
enemy ships shall be in accordance with the directions of the Council,
arrangements shall be made with the Naval Armistice Commission or
Naval Authorities providing that no safe conduct shall be issued for the
voyage of any enemy ship after the delivery thereof without the approval
of the Council.
12. The Council decide that each Associated Government shall furnish
to the Allied Maritime Transport Executive a weekly report showing
exactly the emplojrment of enemy tonnage allotted to it by the Council
for management ; and that the Executive shall furnish a monthly report
to each of the Associated Governments sununarising the emplo3m[ient of
all such tonnage.
18. In view of the extreme importance of the principle being main-
tained that the allocation of enemy tonnage for management and use shall
in no way prejudice the ultimate disposition of the vessels in accordance
with Resolution 1, the Council reconunend that the Associated Govern-
ments take the necessary steps to prevent, and formaUy announce that
they will hold as null and void any action (such as the transfer of shares
in enemy shipping) likely to render the said principle more difficult of
application.
14. Whenever any service for which the Council shall have authorised
the use of enemy tonnage shall have been performed, or whenever enemy
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ALLIED MARITIME TRANSPORT COUNCIL 34S
tonnage may be available which is not required for any such service, the
Council, or during intervals between meetings of the Council, the Execu-
tive, shall determine how vessels not required for such services shall be
used, and the Executive is hereby empowered to issue the necessary
instructions for fitting the tonnage for service.
15. It was announced that the American and British Governments
were agreed that they would divide equally between them the total
Crcrman long-distance passenger tonnage allotted to the two of them
together {i.e., after deduction of tonnage allotted to Prance or Italy), the
.equal division being calculated in terms of troop-carrying capacity.
16. The Council decide that Austrian sailing vessels and small Austrian
vessels under 200 tons gross shall be used as may be determined locally
by the Italian Government and shall not need orders from the Council.
17. The Council decide that it is not possible to arrive at a final decision
as to the share of enemy tonnage to be allotted for management by France
until the other Governments have had an opportunity of fully considering
the documents presented by the French Government.
Enemy Tannage in Neutral Porta.
18. The Council decide that the duty of securing that enemy vessels
interned in neutral ports shall be delivered to the Associated Governments
shall be entrusted to the United States in the case of vessels in South
American ports, to Great Britain in the case of vessels in Dutch ports and
to France in the case of vessels in Spanish ports. The Executive of the
Council shall make the necessary arrangements for one or other of the
Associated Governments to deal similarly with delivery of enemy vessels
in other neutral ports.
Finances of Enemy Tonnage.
19. The Council decide that a financial organisation shall be established
in the Council to deal with the finances of enemy shipping. It was agreed
that the form and scope of the organisation should be discussed at the
next meeting.
Status of German Delegate contemplated in Armistice Clause, and
position of German Ships now building.
20. The Council on receiving the report from the Shipping repre-
sentatives sent by them to Spa to the effect that the German representative
understood that the Delegate contemplated in the terms of the Armistice
of 16th January 1919, would be a Delegate to the Council resident in
London and with definite rights of membership decide that it is essential
that the Delegate in question shall give his advice and assistance only
at such time and in such manner as the Associated Governments may
require. They also decide in connection with the report of the Crcrman
contention that vessels not completely built are not included within the
term *' German Merchant Fleet,' and are not, therefore, among those
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344 DECISIONS AND RESOLUTIONS OF AM.T.C.
to be handed over to the Associated Governments^ that it is essential that
vesj$^ which can be made ready within six months shall, be i n cluded in
the viMsels to be handed over.
The Coimcil therefore decide to suggest to Marshal Foch that he should
add a clause to the terms of the Armistice when renewed on 10th February
to the following effect : —
La totalite de la flotte marchande, y compris les na vires en constructioD
susceptibles de prendre la mer dans les six mois qui suivront les pr^sentes,
sera livree sans d^i, soit dans les ports allies, soit dandles ports despays
neutres dont les gouvemements seront inmiediatement avis& tQegtsfiur
quement par le Gouvemement AUemand.
Cette Uvraison se fera avec la collaboration du D£16gu6 Allemand piivu
k la clause 8 de TArmistice du 16 Janvier et dont les fonctions s^ bomeront
& ceUes d'un Agent d'informations et d^ liaison.
SIXTH SESSION HELD AT PARIS ON 10th MARCH 1919
German Ptissenger Tannage.
1. Long Distance Tonnage Allocation for Management. — ^France will
take 75,000 tons gross of the first 700,000 tons gross of tonnage of the
type which is available. If more than 700,000 tons gross tonnage of tins
type is availaUe, France will take the first 25,000 tons gross in excess of
that figure.
Towards the above total of 75,000 tons gross France vriU take the
three Grerman ocean-going passeng^ vessels now in Spain.
2. It was decided that aU German passenger vessels over 7,000 tons
gross would be assumed to be long distance tonnage and therefore fall
within Decision No. 1.
8. It was decided that all German passenger tonnage below 7,000 tons
gross would be considered by the Executive, who are hereby instructed
to class as long distance tonnage (to fall within Decision No. 1) all vessds
technieaUy suitable for long distance work.
All other vessels to be examined, and as far as possible divided by
agreement by the Executive between France and Great Britain, with
reference to the suitability of the vessels for Cross^Channel and Mediter*
ranean service respectively, and with due regard to French and British
needs for these services. Failing agreement the Elxecutive will refer to
the Council.
4. It was decided that the French claim for 000,000 tons d.w. of enemy
cargo tonnage which was taken as a provisional working basis by a decision
at the Fifth Session should be agreed as the definite share for French
management.
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SEA-BORNE TRAFFIC AT END OF WAR 346
DOCUMENT No. 18
The following memorandum is the only one in Part VI which
was not written before the signature of Peace. Its object is to
show in what proportion British shipping was employed on the
different trade routes, and what it was carrying, at the moment
the war ended ; and so to make a contribution to the question
(which needs further study) as to the precise effect of the sub-
marine campaign on British supplies.
NOTE ON SEA-BORNE TRAFFIC AT THE END OF THE WAR
It has often been asked just what effect the submarine had upon sea
traffic, and in particular on the imports of the country most dependent
upon them, Great Britain. The questicm is not an easy one to answer
and it may be approached by many methods. But we may usefully here
attempt a passing glance at the problem by considering the position and
employment of British Shipfrfng immediately before the end of the war.
Before the War Great Britain owned about 28 million tons d^wdght
of ocean-going tonnage. About half of this tonnage was engaged in
foreign trade and not in bringing home imports. On the other hand about
a third at British imports came in neutral tonnage. The total imports in
1918 amounted to 54,551,000 tons of which 18,066,000 tons was food,
drink and tobacco.
At the end of October 1918 the total British ocean-going tonnage
(after allowing for building, foreign purchases on the one hand and losses
OD the other) had been reduced by about 5 million tons, i.e. to about
18 million tons d.w. Neutral tonnage brought few imports except from
near countries (ore and timber from Scandinavia, ore from Spain) ; the
large neutral tonjiage in the control of the Allies went almost entirely to
France and Italy. On the other hand practically all British tonnage
had been withdrawn from purely foreign trade ; and it was concentrated
to a much larger extent than in peace times on the short Atlantic route.
It was devoted to three great services (a) the needs of the combatant
forces, (b) the Allies, and (c) British imports.
The following table shows the exact allocation on the 81st October
1918 of all British vessels over 1,600 tons gross.
L Non-ltnpofiing (i.e. usually needs of the combatant services)
Navy 1,806,400
Amy 2,167,500
Colonial, &C. .... 1,522,000
Allied:
U.&A 844,100 (indndes estimated loss of 450,000
d.w. on Atlantic linws tlunnigh
carriage of American teoops)
Other 39,900
IL Bepaifing and Swfpeyiug . 1,327,700
7,707,600 (not available for importing work)
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846 SEABORNE TRAFFIC AT END OF WAR
This left a total of about 10^ million tons d.w. available for importing
work, distributed as follows : —
in. Importing services —
(a) Bntish
linen and tramps on bwth .... 5,220,900
Tramps 1,475,000
(6) AUies
France 1,294,600
Itoly 1,554,800
n.S.A. ........ 148,400
Other Allies and neutrals 576,800
10,271,100
Of a total of some 18 million tons d.w. therefore about 4 million tons
(22*2 per cent.) were absorbed directly by the combatant services. Less
than 2 million tons (11*1 per cent.) would cover all the British tonnage
allowed both for Dominion home needs ai^id for the few remnants of
neutral traffic. Over IJ million tons (7 per cent.) were withdrawn for
repair and survey (the proportion of vessels hit by torpedoes which
were got home for repair increased under the convoy system.) Of the
lOj million tons (or 56*9percent.)available for imports about 8| million tons
(or 19-4 per cent.) were allotted to Allied work. This left only about
6| million tons available for British imports. These imports, it is impor-
tant to remember, included not only civilian requirements but, to an
extent difficult to measure with precision, the raw materials for munitions
manufacture. The Ministry of Munitions took control over the materiak
required for munitions, included them in their programme and rationed
them out to the manufacturers. The War Office did the same for the
commodities within their own responsibility. No enquiry proceeding
fix>m an examination of either shipping or imports can distinguish ultimate
destination and use.
With this proviso let us examine the actual utilization of the 6| million
tons available for British imports. The following table is based on a de-
tailed examination of the cargo of every tramp, and the allocation of space
between the different commodities of every liner on the 81st October.
Importing Services (United Kingdom),
D.W. tonnage.
Cereals 1,912,600
Sugar 199,200
Meat 480,900
Oils iuid fats 616,700
Other Foodstofib 397,000
Ore iron and pyrites 447,900
Nitrates 123,200
Other munitions and general cargo .... 2,519,000
6,696,600
Of the above total 5^ million tons were loaded ' on the berth ' i.e. as liners,
less than 1} millions on full cargo tramps. It will be seen that about
8| million tons (54 per cent.) were devoted to food, and about B million
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SEA-BORNE TRAFFIC AT END OF WAR
S47
tons (46 per cent.) to all other imports. The great bulk of the latter
consisted of the raw materials of manufactures required for combatant
service, but such analysis as is possible can only be made on the basis,
not of the employment of shipping, but of the actual imports (see tables
on p. 852). Meantime it is well to note the routes on which the tonnage
was employed. This is sufficiently shown by the following analysis of the
5^ million tons loaded on the berth ; and its significance becomes clear
if we contrast with it a similar analysis of tonnage loaded on the berth
on the same date in the previous year.
British vessels loaded as Liners.
SM October 1917. Slst October 1918.
BouU. Shipe. Tonmage. Ships, Tonnage.
North America (indndmg Ouiada and Gulf),
U.K. (mdading Nor^^naoe) ... 202 1,681,000 276 2,068,000
Sooth America (Atlantio), U.K. (mdndfng North
France) 74 418,000 109 668,000
Australia and New Zealand, U.K. (inohiding
North France) 65 606,000 34 267,000
India (up to Sngapore) and U.K. (indnding
NorthFrance) 109 668,000 81 487,000
Africa (West, South, and East) and U.K.
(indnding North France) .... 68 383,000 61 268,000
Ftf East (east of Smgapore) and U.K. (indnding
NorthFrance) 36 233,000 22 139,000
West Coast America and U.K. (indnding North
France) 22 112,000 20 9^,000
Mediterranean and Bay Ports, and U.K. (indnd-
ing North France) J6 130,000 _63 143,000
681 4,180,000 666 4,136,000
The tables illustrate the following important facts.
(a) The great concentration of vessels in the Atlantic (North and
South) {SS5 ships and 2,750,000 tons in October 1918).
(b) The increased concentration during the year 1917-18 {SS5 ships
and 2,750,000 tons as compared with 886 ships 2,099,000 tons).
This concentration necessitated among other measures the withdrawal of
vessels from cross trades (i.e. not importing into the United Kingdom).
In October 1917 there were 85 Liners of 488,000 g.t. in these cross trades
and this total was reduced by October 1918 to 00 Liners of 290,000 g.t.
It must be remembered that both the withdrawal of vessels from
British trade and their concentration in the Atlantic was already in
process in 1915 ; that the same policy was developed in 1916 and still
more in 1917 ; the results of 1918 are merely the climax of a policy pursued
persistently from the time when tonnage became inconveniently short,
first by the Transport Department and later by the Ministry of Shipping.
This note is intended as a contribution (basai on an analysis of shipping
only) to the question of the effect of the submarine on the supplies of the
country. It needs to be supplemented by an examination of the actual
imports statistics for which the student will find some of the material
available on pp. 852-8.
J. A. S.
December 1920.
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STATISTICS
TABLE No. 1
Bbhtish Vessels Akrivino fbom Overseas. Februart-Apbil» 1917.
With losses.
The follawing table shows the number of British vessds arriving from
overseas (i.e.9 as distinct from those in the coasting and near trades) and
the corresponding losses of such vessels.
For this purpose only vessels lost while proceeding directly from the
United Kingdom to destinations not nearer than Gibraltar and vessds
with cargoes on board for the United Kingdom from such destinations,
have been included.
The statistics show that^ on the rate of loss of the last fortni^t in
April, the risk of loss on an outward vessel was 1 in 14 and of a homewaid
vessd 1 in 5 J. That meant that a vessel leaving the United Kingdom
for an overseas voyage had, at the rate of loss then being sustained, only
about 8 chances to 1 oi returning safely with her cargo.
How different was the impression given by the figures published 1^
the Admiralty (which included coasting vessels) is shown by the Admiralty
statements for the same last fortnight in April.
These gave
Sunk Arrivals. Departures,
Over 1,600 . 78 { « «j>| g on
Under 1,600 . 28 { ^*^^ ^'^"
Analysis of BRmsH Vesseub — 1,600 G.T. and over-
CABOo entrances IN Umtted Kinodom ports
1/2/17—26/4/17—85 days.
-WHICH HAVE MADE
FROM Overseas —
Oidf,
Gib.df
8,Ameriea
W. Indies d,S.
New IwkdB
beyond.
or Cape.
of New York.
N. thereof.
TataL
86 days .
244
266
292
247
1,049
Average per day .
2-94
313
3-48
2-90
12-4
Aprill-26 (inclasiTe) .
Veesek safely arrived say
76-44
81-38
8918
76-40
322-4
77
81
89
76
322
Vessels in above cate-
gories sunk April 1-26
\^S8els making journey
17
11
16
8
62
(arrivals and sunks) .
94
92
106
83
374
18-08%
12%
16-28%
9^%
13-73%
Comparison daring last 14 daps of April 1917.
Arrivals based on above
average .
4M6
48-82
4802
40-6
173-6
Snnk.
9
10
13
6
38
i.e. vessels making the
jonmey • • •
6016
63*82
61-02
46-6
211-6
i^vals and sunks, say
60
64
61
46
211
Percentage snnk .
18%
1860/^
21-3%
13%
18%
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STATISTICS
349
Dtparhmt.
XJJL Ports Febmaiy 1-April 26, 1,103-13 per day.
April l-2«. Dep.»t»n« («) &Wy -^ j ^^ Pe««t.ge of Sm>ta>. 6-6
Totol U.K. risk -April 1-26. 19-5 %. Last 14 days 25-15 %.
^ Mainly on
n.K.-Gib. and
beyond ronte.
TABLE No. 2. BLUE BOOK. RATES
Scales of Rates for hibe of Vessels requisitioned by the
Admiralty adopted on recommendation of the Admiralty
Transport Arbitration Board, October 1914.
(1) OcKAK Passxngkb Ldtkbs.
(a) Armed Merchant Cruiaers.
Per gros9 ton per numth.
9,
22 knots and oyer .
21 knots and under 22
20 „ „ 21
19 „ „ 20
18 „ „ 19
Under 18 knots
25
24
28
22
21
20
With relief from all
risk and expense of
ship and stores.
Period three months oertain.
If period is in excess of three months, rate to be Is, per ton less in eaoh case
in respect of the excess period.
(6) Trooping VesseU.
8.
d.
15 knots and under 17 •
. 17
6
14 „ „ 15 .
. 16
6
18 „ „ 14 .
. 15
6
12 „ „ 13 .
. 14
6
Under 12 knots
. 18
6
If period be less than one month
in excess of two months, rate to be 6c{.
(e) HoapUal 8hipa and Carriers,
14 knots and over
Under 14 knots
\ terms to be arranged. If period is
in eaoh case in respect of excess period.
•. d,
17 6
16 6
Period three months oertaiiC
If period is in excess of three monthSy rate to be 6({. per ton less in each case
in respect of excess period, such reductioo, however, being applicable to the
whole period of employment in the event of its exceeding six months in alL
(2)*Caboo IjINXBs.
13 knots and over .
12 knots and under 18
11 „ „ 12
10 „ „ 11
Under 10 knots
Per gross ton per month.
First 2 months. After 2 months.
s.
d.
s.
d.
16
8
14
9
14
3
18
9
18
3
12
9
12
9
12
8
12
3
11
9
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(2) Caboo Lihbbs (continued)
MiniinniTi period one oakndar month, to be reduoed where owners have beeo
able to employ their veraels before the expiry of a month.
Vessels of 3,000 tons and under 4,000 6d, extra.
„ .,,2,000 „ „ 3,000 1a. „
„ ,, 2,000 U, M, extra.
Special consideration for yessels with sheltw deck accommodati<Hi not
included in the gross tonnage.
(3) GoASTiNO MIXED Passbhgeb akb Caboo Ships.
Per gross ton per
15 knots and under 16
14 „ ^ 16 .
13 „ „ 14 .
12 „ ^ 13 .
Under 12 knots
s. d.
. 20
. 18 9
. 17 6
. 16 3
. 16
If period in excess of two months, rate to be 6<{. per ton less in each case for
excess period.
Special arrangements if period less than one m<Hith and owner oaanot at
once utilize his ship.
(4) GoASTiKo Caboo (only) Ships.
Per gross ton per mot^k,
ByOOO tons and
Under
under 3,000.
2,000 tons.
s. d.
s. d.
16 3 '
16 9
16 3
16 9
14 3
14 9
13 9
14 3
13 3
13 9
13 knots and over .
12 knots and under 13
H „ „ 12
10 „ „ 11
Under 10 knots
A reduction of (id. per ton to be made in all cases for any period the ship is
enrployed beyond one month.
Period less than one month and for shelter deck accommodation provisions
as in (2).
(6) Oil Tank Stbamxbs.
Per d.w. ton per month,
s. d.
Vessels of 4,000 tons and under (d.w.) . . . .90
Vessels over 4,000 tons (d.w.) . .' . . . .89
Minimum period four months, the Admiralty having the option to continue
for any period beyond four months.
(6) Tbamp Stbamebs.
Vessels of 5,000 d.w. tons capacity and over
„ „ 4,000 tons and under 6,000 (d.w.)
„ ,,3,000 „ „ 4,000 ( „ )
„ ,,2,200 „ „ 3,000 ( „ )
„ ,,1,800 „ „ 2,200 ( „ )
9» „ 1,300 „ „ 1,800 ( „ )
A reduction of 6({. per ton to be made for vessels employed beyond one
month and a further reduction of M. per ton for any period beyond two monUis.
Shelter deck accommodation provision as in (2).
Minimum period one calendar month,' to be reduced where owners have been
able to employ their vessels if discharged before the expiry of one month.
Per gross ton per month.
s.
d.
. 9
6
10
10
6
11
11
6
. 12
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STATISTICS
361
TABLE No. 8. SfflPPING PROFITS
Earnings of Tramp Steamers August 1914-September 1916. See
p. 114.
Period 1, Period 2. Periods. Period 4.
Aug. 1914 Jan, 1916 July 1916 Jan. 1916
Fleet of five 6ft00-ton d.w. steamer a to to to to
neuj in July 1914. Dee. 1914. June 1916. Dec. 1916 Sept. 1916.
^30^000 d.w. {6 monJths). (6 monihs). {6 moniha). (9 moniha).
EamingB during Period at average
tiine-oharter rate for each £ £ £ £
period 34,375 104,850 136,406 287,250
BxpencutiiTe at £26 each steamer per
day 19,890 28,530 23,920 35,620
Plus war insuranoe at £8 per oent.
per annum on average value
through period . 5,468 9,200 12,990 19,944
Plus marine risk at £6 per oent.
per annum on average value
through period 5,125 8,625 12,990 28642
30,483 41,355 49,900 84,206
Net earning . . . * . 3,892 63,495 86,506 203,044
Average value through period, of each
steamer .... 41,000 57,500 86,600 127,300
Approximate value of each steamer at
commencement of period .* 36,000 45,700 69,300 102,500
Approximate value of each steamer at
end of period, allowing 3 per
cent, per annum for age 45,700 69,300 102,500 140,000
Average time charter rate during
period 4«.2<i. IZe. 18«. 1^ 35«. 0i<l
These figures include allowance for following proportions of fleet under Government
requisition during each period, rate of hire being taken as eaual to 6«. 3d. per ton d.w. per
month, uid Government assuming War Risk on steamers during service.
Period 1. One steamer f oi^ 5 months. Period 2. One steamer f cur 6 months.
Period 3. One steamer for 6 months Period 4. Two steamers for 9 months
and one for 1) months. and one fcur 3} months.
Daily expenses of a Tramp Steamer of 6,000 tons d.w. under War conditions (1914-1916).
£ 9. d.
Stores, maintenance, provisions . . .800
Mani^ment, Ac 6
Misodlaneous 3
Portage (wages) 9
26
To this must be added :
Marine Insurance on current value at £6 per cent, per annum.
War Bisk at (say) £8 per cent, per annum.
Deineoiation is allowed for by a deaucti<Hi from the appreciating values of the steamers.
Insuranoe on freight is not specifically allowed for as tii^ insurance on the vessel is based
on full current sale prices of ships uid would thus give a sum sufficient to give immediate
replacement.
In the case of requisitioned vessels the War Risk insurance has been eliminated as the
Government takes the risk.
The allowance for stores, maintenance and provisions, management and miscellaneous
has been made at the same rate throughout ; it is ample as an average for the whole period
August 1914-September 1916.
The allowance for requisitioned service is in accordance with the proportion of vessds
actually under requisition at the different periods.
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862 ALLIED SHIPPING CONTROL
Taxation Payable (Excess Profits Duty and Incobie Tax) by the
Fleet of five 6,000-Ton D.W. Cargo Steamers.
(1) Period August 1914-Jiiiie 1915 (11 months). £ £
Gross earnings 139,225
Less expenditure (including insurances on increased values) 71,838
Net earnings .......... 67,387
Less depredation at 4 per cent, per annum on capital value
of fleet (£180,000) 6,600
60,787
Less average profit for average of standard year 33,000
Excess Profits 27,787
Less Excess Profits Duty (at 50 per cent.) . 13,894
Less Income Tax : 1914 £892 @ Is. Sd, ; 1915 £46,001 @ 3«. 6,974
Taxes .... 20,868
(2) Period July 1915-^ptember 1916 (15 months).
Gross earnings 423,666
Less expenditure (inclucUng insurances on increased values) 134,106
Net earnings • 289,550
Less depreciation @ 4 per cent, per annum on cajMtal value
of fleet (£180,000) 9,000
280,560
Less average profit for average of standard years 45,000
Excess Profits . . 285,650
Less Excess Profits Duty (@ 60 per cent,) . . . 141,330
94,220
Less Licome Tax : 1915 £43,962-4 @ 3s. ; 1916 £95,257-6® 5s. 30,409
Taxes 171,739
20,868
Totol Taxes 26 months . . 192,607
TABLE No. 4. IMPORT STATISTICS 1918-17
United Kingdom.
ImparUf in 1,000 ions. j^^^
CommodUy. 1913. 1916. 1917.
Tons. Tans. Tons.
Cereals, human consumption .... 8,094 7,532 7,003
Cereals, animal consumption .... 3,000 2,000 1,533
Peas, beans and dried vegetables ... 176 105 110
Sugar 1,969 1,537 1,391
Meat 1,186 1,175 986
Oils' and fats 1,904 1,724 1,283
Other foodstufb 3,502 2,924 2,010
Iron ore 7,565 7,004 6,205
Pyrites 782 951 854
Iron and steel, other metals and ores, guns, ammuni-
tions, Ac 3,624 3,605 4,251
Nitrates, chemioate, t>anning substances, &o. . 636 681 592
Mineral oili and lubricating oils not imported in
tankers. ....... 267 327 427
Wool 434 305 334
Cotton 971 969 736
Flax, hemp, jute, silk, and textile manufactures . 756 631 433
Timber and manufactures 11,684 6,373 3,012
Hides, leather and skins 208 203 182
Tobacco 75 77 22
Paper and paper-makmg materials 1,373 1,280 586
Mlsoellimeous, including certain munitions, &o.,
which cannot be separated in Trade Returns 4,087 2,923 2,467
Total . . . 52,798 42,326 34,417
1 Includes castor oil.
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STATISTICS 353
Italy.
Imparts in 1,000 tons.
Imports.
1913. 1916. 1917.
Commodity, Tons, Tons, Tons,
Cereals for human oonsumption .... — — 2,388
Cereals for animal consumption .... — — 290
Peas, beans and dried vegetables ... — — 31
Sugar — — 60
Meat — — 101
Oils and fats — — 38
Other foodstuffs — — 95
Castor oil — — 1
Mineral oils — — 77
Iron ore ...... ^
Pyrites ... ... I
Iron and steel and other metals and ores, guns, f i^7
ammunition, Ac j
Nitrates, ohemicals, tanning substances, &o. . — — 243
Coal and coke — — 5,042
Wool — — 40
Cotton — — 180
Flax, hemp, jute, silk, and textile manufactures . — — 31
Timber and manufactures — — 46
Hides, leather and skins — — 21
Tobacco — — . 25
Paper and paper-making materials ... — — 30
liiGscellaneous — — 863
Total .... 18,000 15,600 11^109
France.
Imports in 1,000 tons.
Imports.
1913. 1916. 1917.
Commodity, Tons, Tons. Tons.
Cereals and pulses — — 2,510
Cereals for animal consumption .... — — 727
Sugar — — 601
Meat — — 301
Oils and fats — — 715
Other foodstuffs — — 1,118
Castor oil — 78
Iron ore — —
Pyrites — — —
Iron and steel and other metals and ores, guns,
ammunition, Ac — — 6,496
Nitrates, chemicals, tanning substances, &c. . . — — 1,449
Coal and coke — — 17,279
Wool — — 71
Cotton — — 274
ilax, hemp, jute, silk, and textile manufactures . — — 266
Timber and manufactures — — 238
Hides, leather and skins — — 67
Tobacco — — 36
Paper and paper-making materials ... — — 238
Miscellaneous — — 760
Total 43,500* 39,000* 32,202
* Totals taken from Minist^re des Finances Documents Statistiques sur le Commerce de
la France, December 1916, but oil fuel has been deducted.
1569.33 A a
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354
ALLIED SHIPPING CONTROL
TABLE No. 5
Table showinu Totai. Estimated Weight of British Ikposts honthlt
FHOM July 1917 to Octobeb 1918 with Momthlt Avesaoe.
Btlimattd weight in thoutandt of km*.
Manihand
year.
Food, drink,
andtobaeeo.
Bow
maienaU,
1917
Jnly . .
August
September .
October
Noyember •
December .
1,604
1^1
957
808
817
599
1,607
1,765
1,590
1,743
1,722
1,401
Total .
6,046
9,828 .
Monthly ayerage •
1,008
1,638
1918
Jaauaiy
February .
March.
as": : :
June .
694
779
816
1,233
1,396
915
1,736
1,510
1,644
1,509
1,627
1,559
Total .
5,833
9,585
Monthly ayerage .
972
1,598
1918
July .
August • •
October
822
1,002
855
1,005
1,759
1,871
1,540
1,527
Total .
8,684
6,697
Monthly ayerage ,
921
1,674
TciUA iwdnHmg
Mam^aeUind
€Md Mncl4u$ifiod
203
347
312
313
370
304
3,418
3,382
2,868
2,887
2,944
2,306
1,849
17307
308
2,968
339
266
310
339
328
226
2,779
2,559
2,772
3^087
3,354
2,700
1,808
17,251
301
2,875
402
372
365
484
2,986
8,247
2,756
3,018
1,613
12,007
403
3,002
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STATISTICS
355
TABLE No. 6
War Losses of Merchant Vessels of Allied and Neutral Nations
August 1914 to November 1918. Losses of all Classes of
Vessels in Gross Tonnage in each Month.
August, SepUmber,
America
Belgium
Brazil .
British Empire
Oaba
FVanoe
Greece
Italy
Japan
Peru
Portugal
Roumania
Russia .
Uruguay
Argentine
Denmark
Holland
Norway
Persia •
Spain •
Sweden .
Total 1914
34
46,603
40
717
6,868
5,102
64,752
79,798
613
48
285
1,270
3,804
1,234
2,534
89,586
1914
October.
83,651
2,221
1,802
3,377
1,127
694
758
1,652
95,282
November. December,
15,730
5,183
7
580
200
1^7
2,595
25,802
7,010
2,458
1,455
3,365
3,094
TotaJ.
34
252^738
14,414
2,462
48
285
4,094
11,176
11,974
11,902
758
9,875
43>978 319,400
A a 2
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360
ALUED SfflPPING CONTROL
Programme
Mar. 15-Apr. 14 .
Apr. 15-Mayl4 .
May 15-Jmie 14 .
Jone 15^aly 14 .
July 15-Aug. 14 .
Aug. 15-Sept. 14 .
Sept. 15-Oct. 14 .
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11 months
TABLE No. 7
Italian Coal,
Execution March IQIS-February 1919.
8hif>mefUs
British coal
byUmgsea
route.
Tons.
160,000
227,372
246,545
161,194
281,500
302,839
295,804
289,492
402,986
378,406
267,118
628,296
Total 1 1 months 3,481,552
1,650,000
British coal
passing
Italian
frontier.
Tons,
100,000
161,135
123,973
108,918
116,931
93,994
97,932
88,137
85,175
69,250
45,265
16,201
1,006,911
1,100,000
French ooal
passing
Italian
frontier.
Tons.
170,000
132,109
137,082
108,122
104,962
107,459
104,578
91,335
68,383
21,188
8,423
4,339
887.980
French coal
onboard
atMediieT'
ranean ports.
Tons.
180,000
104,802
88J69
111,943
111,565
124,439
105,000
93,971
80,479
34,932
25,476
14,899
, 895,676
Total
Tons.
600,000
625,418
595,769
490,177
614,968
628,731
603,314
562,935
637,023
503,776
346,282
663,735
6,272,118
In addition to the above quantities, a special
British ooal was despatched to Italy.
1,870,000 1,980,000 6,600,000
military aUocati<Hi of 150,000 tons of
French Coal.
Execution March 1918-February 1919.
Tons.
Programme per month 1,740,000
April 1,495,000
May 1,530,000
June 1,260,000
July 1,489,000
August 1,394,000
September 1,244,000
October 1,251,000
November 1,262,000
December 1,154,000
January 1,217,000
Total 10 months 13,296,000
Programme 10 months 17,400,000
Belgian Relief.
Eaaecution June 1918-November 1918.
Month.
Programfne.
Execution.
June-August .
September
October .
November
360,000
122,500
161,000
111,800
334,070
80,170
163,940
116,500
Total .
756,300
694,680
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STATISTICS
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366
ALLIED SHIPPING CONTROL
TABLE
SUBfHABT» BY MONTHS AND QUABTEKS, OF LoSSES (WaB AND MaBINE CaUSSS)
18T JaNUABY to
Seagoing Steam Merchant Vesidi
(All figures in thousands
Period. •
January
Febraary
March
Itt Quarter
June
2ndQiuurter
July
AngoBt
Septembet
8rd Quarter
October
Total for Period
ItaJp.
Frauce*
United Kinifdom. |
Toial
Losaes.
Total
Oaifu,
Loesor
Qoin,
Total
Loeees,
Total
Oaine.
Net
Loesor
0am.
Total
Losaee.
Total
Qaine.
Na
Loeeor
Gain.
29
38
64
8
3
8
- 21
- 36
- 68
46
10
23
- 46
- 10
- 23
320
362
319
108
137
263
-212
-226
- 66
lai
19
-112
79
- 79
1,001
608
-498
5
28
5
11
13
17
+ 6
- 16
+ 12
30
24
26
- 30
- 24
- 26
341
312
247
m
281
200
-186
- 31
- 47
88
41
+ 8
79
- 79
900
686
-264
34
3
8
- 26
-"3
20
32
11
9
- 20
- 32
- 2
249
238
226
231
221
232
- 18
- 17
+ 6
87
8
- 29
68
9
- 54
718
684
- 29
11
••
- 11
13
• •
- 13
121
227
+ 106
217
68
-149
284
"9
-225
2,786
2,065
-680
NoTX. — * Loesea \ ' Gainfl \ and ' Net Loss or Gain * in this table are ezchiiiTe 0!
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STATISTICS
367
No. 18
AND Gains in Allied and Neutral Tonnaoe fob the Period from
818T October 1918.
of 600 Gross Tons and over.
of deadweight tons.)
United states.
Other Allies.
Nevirali
Total
LoMee.
Total
Gains.
Net
Lossor
Gain.
Total
Losses.
Total
Gains.
Net
Lossor
Gain.
Total
Total
Gains.
8
21
24
96
1S7
182
+
+
+
88
116
168
42
26
46
60
60
60
+ 8
+ 26
+ 6
67
60
83
24
24
24
68
415
+
868
112
160
+ 88
200
.72
27
64
60
191
2S8
302
+
+
+
164
220
262
26
11
8
20
96
80
- 6
+ 84
+ 72
27
32
48
41
12
63
181
TIB
+
645
44
106
+ 151
107
106
44
70
46
270
346
386
+
+
+
226
276
340
33
48
30
63
110
78
+ 30
+ 62
+ 48
24
40
28
6
19
26
160
1,001
+
841
111
851
+ 140
101
60
44
429
+
386
30
76
+ 46
38
36
888
2,681
+2,288
207
672
+ 875
465
868
Net
Lossor
Gain.
- 83
- 46
- 60
-187
+ 14
- 20
+ 6
- 1
- 18
- 30
- 3
- 51
Total.
Total
Total
Gains.
Net
Lossor
Gain.
602
626
668
286
361
627
- 216
- 174
- 31
1,585
1,164
- 481
466
461
383
418
084
662
- 37
+ 228
+ 260
1,200
1,754
+ 465
404
437
344
678
696
730
+ 174
+ 268
+ 886
1,186
2/m
+ 818
267
767
+ 610
868 -188 4^826 5,688 +1,868
ohaaget in tonnage due to transfers of flag and sundry adjustments.
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368
ALLIED SHIPPING CONTROL
TABLE No. 14
Ihpokt Programmes. Sept.-Dec. 1918.
Requiremenis and Arrivals. Position as on 16th November 1918.
ArrivaU.
Amwli
Bequire-
oppftfui
ments.
Actual.
(or tonnage
arrangeii.
OiOJ
Sept.-
rtowft-
Dec.
Sept.
Oct.
Nov.
Dec
TotaL
me»U
United Kingdom.
GerealB •
2,060,000
696,732
664,688
692,284
600,926
2,344,630
1144
Meats
400,000
118,251
103,637
98,723
119,276
439,786
109^
Fats ...
180,000
62,646
41,147
33,462
32,436
169,681
88-7
MisoeUaneoQB foods—
ClassA
140,000
28,860
46,906
40,206
40,648
166,610
1111
Suear -
MisoeJlaneons f oods^
380,000
98,139
140,794
67,646
102,609
409,187
107-6
aassB
24,900
6,892
1,366
3,639
36
10,922
43^
Seeds and oils
400,000
90,664
92,781
133,447
96,661
413,443
1034
Total -
3,660,000
991,164
1,080,208
France.
969,396
892,491
3,933,259
110-5
Cereals -
840,000
363,190
266,770
166,261
136,369
922,590
109-8
Meats .
160,000
29,160
36,936
34,218
63,289
163,603
96^
Fats
66
43
—
99
~~
MisceUaneoQS foods—
ClassA
40,000
1,668
2,817
1,226
3,600
9,210
23-0
Sugar .
160,000
22,243
34,332
49,967
84,863
141,395
m
ClassB
40,000
8,873
3,439
976
1,000
9,288
23-2
Seeds and oils
200,000
10,223
20,637
51,329
80,269
162,448
81-2
Total
. 1,430^000 430,413 364,974 293,966 309,280 1,398,633
lUdy.
Cereals -
Meats
Fats
Misoellaneoiis foods—
ClassA
Sugar ...
Misceilaneons foods —
ClassB
Seeds and oils
Total •
97-8
996,000
146,000
10,000
222,186
16,328
818
360,066
33,806
2,034
267,669
27,289
1,769
197,393
40,236
2,723
1,037,213
116,658
7,334
101-2
8(H
24-4
46,000
16,000
3,298
3,843
3,374
1,860
2,336
4,840
1,905
6,171
10,912
16,714
24-2
111-4
60,000
=
282
"~"
6,147
6,429
m
m
. 1,260,000 246,473 401,421 293,792 264,674 1,195,260
Note. — ^This table shows the shipping actuaUy arranged at the time of the Armistice in execnlioo d
the new food programme for the cereal vear beginning in September 1918. It will be seen that the oeretl
tonnage required had been fully provided for every country, and that though the arrangements wete k«
complete for other foodstuffs (for which Allied responsibility was more recent), the marimum total (fefia^
for any country was less than 6 per cent. See p. 232.
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STATISTICS
369
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ABBREVIATED INDEX
(The reader will probably find the Table of Contents on pp. xvii-zziii more useful
than this Index.)
Admiralty Arbitration Board, 43.
Ajpreements, shipping, 138, 148, 223, 332.
Air-raids, 119.
Allied Maritime Transport Council {aee
Part IV, Table of Contents) :
constitntion, 176.
establishment, 161.
personnel, 298.
work (summary), 231, 239.
Allied Maritime vmtnsport Exeoutive (aee
Part IV):
constitution, 177.
personnel, 298.
work, 189, 231.
Allocation cd shipping, 61.
Amerioa :
control system, 142.
effect of entry into war, 80, 101.
shij^building, 82.
American Shipping Board, 83.
Angary, law of, Iv!.
Austrian tonnage, 224, 227.
Babington Smith Committee (Imports
Sanction Committee), 75.
Belgian Relief, 171, 236.
Blockade, 98.
Blue Book rates, 43.
Board of Trade, 39, 96.
British shipping, 8, 9.
British shipping control, 38-86.
Brussels Fmanmal Conference, 276.
Building, 81.
Bunker control, 104.
Bunker depoto, 104.
Bunker supi^ies, 63.
Chrondodcal T&ble, 36.
Coal, Me France (coal), Italy (coal), &c.
Commission Internationale de RayitaiUe-
ment, 134.
Committees, prindplee for use (d, 259.
Commoditiee, control (^, 88
Control SYStem, 16, 88, 97.
Convoy, 122.
Covenant id League, 264, 267.
Danish tonnage, 102.
Dazzle painting, 119.
Defensive armament, 118.
Documents, 281.
Dutch tonnage, 102.
Duties of League, 267.
Finance, 16.
France:
coal, 161, 236, 360.
control system, 141.
food, 232, 368.
munitionB, 233.
shipping control, 141.
Freight Committee, 185.
Freight market, 11.
Freights, 45, 48, 69.
Freights and profits, 109.
German tonnage, 223, 228, 230.
Imports:
prohibition and licensing of, 25.
tables, 352-3.
Imports Restriction Committee, 75.
Inter-Allied Shippinf^ Committee, 140.
International administration, 243.
Italy:
coal, 160, 234, 360.
control system, 141.
food, 232, 368.
munitions, 233.
shipping control, 141.
Japan, 209.
League of Nations, 264.
licensing, 25.
liner requisitioning, 72.
liners, 9.
Losses, 355-67.
Meat and Fats Executive, 93.
Mines, 47.
Ministry of Food, 92.
Ministry of Munitions, 93.
Ministry of Shipping, 70.
bs
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372
ABBREVIATED INDEX
■' Neutrals, 102.
Neutral tonnage, 102, 108.
Norwegian toimage, 107.
Officials and shipowners, 73.
Ore, 107.
Overseas Prize Disposal Committee, 45.
Paris Conferenoe, 151.
Pool tonnage (neutral), 170, 237, 296, 360.
Port conditions, 53, 218.
Port and Transit Executive Committee,
53.
Private enterprise, 15.
Prizes, 45.
Profits, shipping, 109, 113, 114, 351.
Programme committees :
list, 183, 326.
objects, 181.
relations with AJI.T.C, 301.
Prohilntion of imports, 25.
Proportionate requisitioning, 59.
Protected approach areas, 120.
Rationing, 90, 92.
Rationing policy, 100.
Release, conditional, 62.
Reprisals order, 100.
Requisitioning (Carriage of Foodstuffs)
Committee, 51.
Requisitioninff system, 39, 55, 57, 61.
Russian suppfy needs, 140.
Shipbuilding, 81.
Ship licensing Committee, 49.
Shipowners and officials, 73.
Shipowners and profits, 110.
Shipping ol the world, 7» 8.
Shipping conferences, 9.
Shipping Control Committee, 64.
Shipping position at di£ferent periods, 84.
Statistics, 348-69.
use of, 185.
Submarines, 116.
Sugar Commission, 90,
Supreme Council, 265.
Supreme Economic Council, 221.
Tonnage, see Shipi^ng.
Tonnafi» Priority Committee, 75.
Trade Division of Admiralty, 42.
Transport Department, 39.
Wheat Executive, 91.
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OUTLINE OF PLAN
FOR THE
ECONOMIC AND SOCIAL HISTORY OF THE
WOBLD WAR
EDITORUL BOARDS
(Further arrangements to be announced later.)
6b£AT Brttain
Sir William Beveridge, K.C.B., Chairman.
Mr. H. W. C. Davis, C.B.E.
Professor E. C. K. Conner, C.B.E.
Mr. Thomas Jones.
Mr. J. M. Keynes, C.B.
Mr. F. W. Hirst.
Professor W. R. Scott.
Professor James T. Shotwell, ex officio.
France
Professor Charles Gide, Chairman.
M. Arthur Fontaine, Vice-Chairman.
Professor Henri Hauser, Secretary.
Professor Charles Rist.
Professor James T. Shotwell, ex officio.
Belgium
Dr. H. Pirenne, Belgian Editor.
AUSTBIA-HUNOARY
Professor James T. Shotwell, ex officio. Chairman.
Professor Dr. Friedrich von Wieser, Honorary Secretary.
Professor Dr. Clemens von Pirquet, Honorary Treasurer.
Dr. Gustav Gratz.
Dr. Richard Riedl.
Dr. Richard SchOller.
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Italy
Professor Luigi Einaudi, Chairman.
Professor Pasquale Jannaccone.
Professor Umberto Bicci.
Professor James T. Shotwell, ew officio.
The Baltic Countries
Professor Haralcl Westergaard (Denmark), Chairman.
Professor Eli Heekscher (Sweden).
Mr. N. Rygg (Norway).
Professor James T, Shotwell, ex officio.
The Netherlands
Professor H. B. Greven, Editor for the Netherlands.
MONOGRAPHS IN COURSE OF PREPARATION
(This list includes only those at present in course of preparation, and will
be added to from time to time.)
Great Britain
British Archives in Peace and War, by Dr. Hubert HalL
Manual of Archival Administration, by Captain Hilary Jenkinson.
Bibliographical Survey, by Dr. M. E. Bulkley.
The War Gk>vemment of Great Britain and Ireland with special reference
to its economic aspects, by Professor W. G. S. Adams, C.B.
War Government in the Dominions, by Professor A. B. Keith, D.C.L.
The Mechanism of Certain State Controls, by Mr. E. M. H. Lloyd.
Rationing and Food Supply, by Sir William Beveridge, K.C.B., and
Professor E. C. K. Gonner, C.B.E.
Prices and Wages in the United Kingdom during the War, by Professor
A. L. Bowley.
Food Statistics of the War Period, by Professor E. C. K. Gonner, C.B.E.
Taxation during the War, by Sir J. C. Stamp, K.B.E.
The General History of British Shipping during the War, by Mr. E. Ernest
Fayle.
Allied' Shipping Control ; an Experiment in International Administration,
by Mr. J. A. Salter, C.B.
The British Coal Industry during the War, by Sir Richard Redmayne,
K.C.B.
The British Iron and Steel Industries during the War, by Mr. W. T.
Layton, C.H., C.B.E.
The Wool Trade during the War, by Mr. E. F. Hitchcock.
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The Cotton Control Board, by Mr. H. D. Henderson.
Food Production, by Sir Thomas Middleton, K.B.E.
English Fisheries during the War, by Professor W. A. Herdman, C.B.E.
The Labour Unions; Transport trade unions (excluding railways),
Mining trade unions. Workshop organization. Railway trade unions
Relation of skilled and unskilled workpeople ; by the Labour Research
Department (Mr. G. D. H. Cole).
Labour Supply and Regulation, by Mr. Humbert Wolfe, C.B.E.
The Agriculttural Labourer during the War, by Mr. Arthur Ashby.
The Health of the Civilian Population during the War, by Dr. A. W. J.
Macfadden, C.B.
The Clyde Valley during the War, by Professor W. R. Scott and Mr. J. Cun-
nison.
Scottish Agriculture during the War, by Mr. H. M. Conacher.
Scottish Fisheries during the War, by Mr. D. T. Jones.
Scottish Textiles (jute) during the War, by Dr. J. P. Day and Dr. R. C.
Rawlley.
Source Materials of Relief Organizations in Scotland, by Miss N. Scott.
The Effects of the War on the Economic and Industrial Development of
Ireland, by Professor Charles H. Oldham.
Fbance
Bibliographical Guide to the Literature concerning France for the
Economic History of the War, by Dr. Camille Bloch.
Administrative and Constitutional Changes caused by the Economics of
the War in France, by M. Chardon.
French Industry during the War, by M. Arthur Fontaine.
The Organization of War Industries, by M. Albert Thomas.
(Government Control — ^Nationcd and International, by M. Etienne Clementel.
Rationing and Food Control, by M. Adolphe Pichon.
Price Fixing, by Professor Charles Gide.
Statistical Study of Prices during the War, by M. March.
French Commercial Policy during the War, by Professor Henri Hauser.
The Blockade, by M. Denys-Cochin.
Changes in French Commerce during the War, by Professor Charles Rist.
French Merchant Shipping during the War, by M. Paul Grunebaum-
Ballin.
Internal Waterways, Freight Traffic, by M. Pocard de Kerviler.
Reorganization of French Ports, by M. (^eorges Hersent.
French Railroads during the War, by M. Marcel Peschaud.
Supply of Coal and Petroleum, by M. Peyerimhof.
Metallurgy and Mining, by M. Pinot.
The Chemical Industries, by M. Mauddre.
Aeronautic Industries, by Colonel Dh&
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The Development of Hydraulic Power, by Professor Raoul Blanchard.
Forestry and the Timber Industry during the War, by General Chevalier.
French Agriculture during the War» by M. Aug6-Laribe.
Labour during the War, by MM. Oualid and Picquenard.
Unemployment during the War, by M. Crehange.
Women in Industry under War Conditions, by M. Frois.
Syndicalism, by M. Roger Picard.
Foreign and Colonial Labourers in France, by M. Nogaro.
Problem of Housing during the War, by M. Sellier.
Statistics of Population, by M. Huber.
The Cost of the War to France, by Professor Charles Gide.
War Costs : Direct Expenses, by Professor C. Jeze.
War Finances, by M. Truchy.
The Money Market and French Banks, by M. Aupetit.
The Movement of ESxchange, by M. Decamps.
Questions of Public Health and Hygiene, by Professor Leon Bernard.
The Economic Redivision of France (Regionalism), by Professor Henri
Hauser.
The Invaded Territory of France, by M. Demangeon.
The Refugees, by M. P. Caron.
The Organization of Labour in the Invaded Territories, by M. Boulin.
The Economic History of French Cities during the War, by MM. Sellier
(Paris), Herriot (Lyon), Brenier (Marseille), Levainville (Rouen), etc
The Colonies, by M. Giraud.
Northern Africa, by M. Aug. Bernard.
The Allied Armies in France, by M. DoUeans.
Alsace-Lorraine, by G. Delahache.
Beloium
The History of Belgium after the Armistice, by Dr. H. Pirenne.
The Deportation of Belgian Workmen and the Forced Labour of the
Civilian Population during the German Occupation of Belgium, by
M. Femand Passdecq.
The Food Supply of Belgium during the German Occupation, by M. Albeit
Henri.
German Legislation with Reference to the Occupation of Belgium, by
M. M. Vauthier and M. J. Pirenne.
Unemployment in Belgium during the German Occupation, by Professor
Ernest Mahaim.
The Social History of Belgium during the German Occupation, by
M. J. Pirenne.
Destruction of Belgian Industry by the Grcrmans, by Count Kerchove.
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AUSTKIA-HUNOARY
AiMtria-Hungary :
Bibliography of Printed Materials, by Dr. Othmar Spann.
Survey of the Economic Situation in Austria at the Outbreak of the War
by Dr. Richard Schiiller.
War Government in Austria-Hungary, by Professor Dr. Joseph Redlich.
The Economic Use of Occupied Territories : Russia and Roumania, by
Dr. Gustav Gratz and Dr. Richard Schiiller.
The Elconomic Use of Occupied Territories : Serbia, Montenegro, Albania,
by General Kerchnawe.
* Mittel-Europa ' : the Preparation of a new Joint Economy, by Dr. Gratz
and Dr. Schmier.
The Exhaustion and Disorganization of the Hapsburg Monarchy, by
Professor Dr. Friedrich von Wieser.
The Break-up of the Monarchy, by Dr. Richard Schiiller.
Empire of Austria :
The Economic Situation of Austria before the War, by Dr. G. Stolper.
Regulation of Industry in Austria during the War, by Dr. Richard Riedl.
Food Control and Agriculture in Austria during the War, by Dr. H. Ldwen-
feld-Russ.
Kingdom of Htmgary :
General History of the War Economics of Hungary, by Dr. Gustav Gratz.
Public HedUh and the War in Austria-Hungary :
General Survey, by Professor Dr. Clemens von Pirquet.
Military Survey, by Colonel Georg Vdth.
(Others to follow.)
The United States
Guide to American Sources for the Economic History of the War, by
Mr. Waldo G. Leland and Dr. N. D. Mereness.
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